10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 001-34719

S&W SEED COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Nevada	27-1275784
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
2101 Ken Pratt Blvd., Suite 201, Longmont, CO	80501
(Address of Principal Executive Offices)	(Zip Code)

(720) 506-9191

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	SANW	The Nasdaq Capital Market

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $26,541,012.

The number of shares outstanding of common stock of the registrant as of September 23, 2020 was 33,450,569.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for its next Annual Meeting of Stockholders are incorporated herein by reference inPart III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement is to be filed with the Securitiesand Exchange Commission within 120 days of the registrant's fiscal year ended June 30, 2020.

S&W SEED COMPANY

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2020

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS			1
PART I			3
	Item 1.	Business	3
	Item 1A.	Risk Factors	11
	Item 1B.	Unresolved Staff Comments	26
	Item 2.	Properties	27
	Item 3.	Legal Proceedings	28
	Item 4.	Mine Safety Disclosures	28
PART II			29
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	29
	Item 6.	Selected Financial Data	30
	Item 7.	Management’s Discussion and Analysis of Financing Condition and Results of Operations	31
	Item 7A.	Qualitative and Quantitative Disclosures About Market Risk	48
	Item 8.	Financial Statements and Supplementary Data	49
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89
	Item 9A.	Controls and Procedures	89
	Item 9B.	Other Information	90
PART III			91
	Item 10.	Directors, Executive Officers and Corporate Governance	91
	Item 11.	Executive Compensation	91
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	91
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	91
	Item 14.	Principal Accountant Fees and Services	91
PART IV			92
	Item 15.	Exhibits and Financial Statement Schedules	92
	Item 16.	Form 10-K Summary	97
SIGNATURES			98

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: statements concerning the potential effects of the COVID-19 pandemic on our business; any projections of revenue, margins, expenses, tax provisions, earnings, cash flows and other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding our ability to raise capital in the future; any statements concerning expected development, performance or market acceptance relating to our products or services or our ability to expand our grower or customer bases or to diversify our product offerings; any statements regarding future economic conditions or performance; any statements of expectation or belief; any statements regarding our ability to retain key employees; and any statements of assumptions underlying any of the foregoing. These forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. We have based these forward-looking statements on our current expectations about future events. Such forward-looking statements are subject to risks, uncertainties and other important factors, including certain assumptions, that, if they never materialize or prove incorrect, could cause our actual results and the timing of certain events to differ materially from those expressed or implied by such forward-looking statements. Risks, uncertainties and assumptions include the following:

• The duration of the COVID-19 pandemic and the extent to which it continues to disrupt the local and global economies, as well as our business and the businesses of our customers, distributors and suppliers;

• changes in demand for our seed products and stevia development program;

• our plans for expansion of our business (including by expanding crop offerings and market share of existing offerings through acquisitions) and our ability to successfully integrate acquisitions into our operations;

• whether we continue to invest in research and development and whether such investment results in trait improvement across our crop categories;

• the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations;

• market trends and other factors affecting our financial condition or results of operations from period to period;

• the impact of crop disease, severe weather conditions, such as flooding, or natural disasters, such as earthquakes, on crop quality and yields and on our ability to grow, procure or export our products;

• the impact of pricing of other crops that may be influence what crops our growers elect to plant;

• whether we are successful in aligning expense levels to revenue changes;

• whether we are successful in monetizing our stevia business;

• the cost and other implications of pending or future legislation or court decisions and pending or future accounting pronouncements; and

• other risks that are described herein including but not limited to the items discussed in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K, and that are otherwise described or updated from time to time in our filings with the SEC.

You are urged to carefully review the disclosures made concerning risks and uncertainties that may affect our business or operating results, which include, among others, those listed in “Risk Factors” below.

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Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Many factors discussed in this Annual Report on Form 10-K, some of which are beyond our control, will be important in determining our future performance. Consequently, these statements are inherently uncertain and actual results may differ materially from those that might be anticipated from the forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Annual Report on Form 10-K as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Furthermore, such forward-looking statements represent our views as of, and speak only as of, the date of this Annual Report on Form 10-K, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. We undertake no obligation to publicly update any forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

When used in this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “the Company,” “S&W” and “S&W Seed” refer to S&W Seed Company and its subsidiaries or, as the context may require, S&W Seed Company only. Our fiscal year ends on June 30, and accordingly, the terms “fiscal 2020,” “fiscal 2019” and “fiscal 2018” in this Annual Report on Form 10-K refer to the respective fiscal year ended June 30, 2020, 2019 and 2018, respectively, with corresponding meanings to any fiscal year reference beyond such dates. Trademarks, service marks and trade names of other companies appearing in this report are the property of their respective holders.

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PART I

Item 1. Business

Overview

We are a global multi-crop, middle-market agricultural company. We are market leaders in the breeding, production and sale of alfalfa seed and sorghum seed. We also have a growing commercial market presence in sunflower, wheat and pasture seed and maintain an active stevia development program.

Our seed platform develops and supplies high quality germplasm designed to produce higher yields for farmers worldwide. We sell over 500 seed products in more than 40 countries. We maintain an active product pipeline and expect to introduce more than 25 new products during the 2021-2022 fiscal years.

Founded in 1980, we began our operations as a limited producer of non-dormant alfalfa seed varieties bred for warm climates and high-yields, including varieties that can thrive in poor, saline soils. Over the years we have built a diversified, global agricultural platform through a combination of organic growth and strategic acquisitions and collaborations, including:

• Our 2012 acquisition of Imperial Valley Seeds, Inc., which enabled us to expand production of non-GMO alfalfa seed into California's Imperial Valley, thereby ensuring a non-GMO uncontaminated source of alfalfa seed due to the prohibition on growing GMO crops in the Imperial Valley, as well as enabling us to diversify our production areas and distribution channels;

• Our 2012 acquisition of a portfolio of dormant alfalfa germplasm, which launched our entry into the dormant alfalfa market;

• Our 2013 acquisition of Seed Genetics International Pty Ltd (now S&W Seed Company Australia Pty Ltd, or S&W Australia), the leading producer of non-dormant alfalfa seed in South Australia, which made us the largest non-dormant alfalfa seed company in the world, with production capabilities in both hemispheres;

• Our 2014 acquisition of alfalfa production and research facility assets and conventional (non-GMO) alfalfa germplasm from Pioneer Hi-Bred International, Inc.,  or Pioneer (now a subsidiary of Corteva Agriscience, Inc., or Corteva), which substantially broadened and improved our dormant alfalfa germplasm portfolio and deepened our production, research and product development capabilities;

• Our 2016 acquisition of the business and assets of SV Genetics Pty Ltd, a developer of proprietary hybrid sorghum and sunflower seed germplasm, which expanded our crop focus into two areas which we believe have high global growth potential;

• Our 2018 acquisition of the assets of Chromatin, Inc. and related companies, which positioned us to become a global leader in the hybrid sorghum seed market and enhanced our distribution channels both internationally and within a U.S.-based farmer-dealer network;  

• Our 2018 joint venture with AGT Foods Africa Proprietary Limited and 2019 joint venture with Zaad Holdings Limited, both based in South Africa, each of which were formed to produce our hybrid sunflower, grain sorghum and forage sorghum seed in Africa for sale in Africa, the Middle East and Europe;

• Our 2019 license of commercialized and developmental wheat germplasm from Corteva, through which we entered the largest grain crop market in Australia;

• Our 2020 acquisition of Pasture Genetics Pty Ltd., or Pasture Genetics, the third largest pasture seed company in Australia, which further diversified our product offerings in Australia and strengthened our Australian sales team and distribution relationships;

• Our 2020 collaboration with ADAMA Ltd., or ADAMA, a subsidiary of China National Chemical Engineering Co Ltd., or ChemChina, to bring to the U.S. sorghum market the DoubleTeam™ grassy weed management system, consisting of ADAMA’s proprietary herbicides and our non-GMO, herbicide tolerant sorghum hybrids; and

• Our 2020 licensing agreement with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, IN, to develop and commercialize worldwide a non-GMO, dhurrin-

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free trait in sorghum species, which essentially eliminates potential livestock death from hydrogen cyanide poisoning when grazing sorghum.

Our Strategy

The global agriculture market is experiencing rapid change driven by population growth, increasing consumer demand and emerging markets, environmental challenges, limited availability of arable land and diverse regulatory requirements. As a result, farmers and other industry participants are facing continuous pressure to cost-effectively increase productivity and output. These and certain other factors have led to strategic realignments and significant consolidation in the seed industry, leaving a small number of large players.

We believe this environment presents an opportunity to build a global agricultural company focused on crop and market opportunities that large seed companies may overlook, underserve or ineffectively address.

We believe our core strengths listed below position us to capitalize on this market opportunity:

• Strong Germplasm Asset Base and Development Capabilities. We believe we have the largest and most diversified alfalfa and sorghum germplasm pool in the world.  Our germplasm pool offers traits sought by farmers who grow forage hay, forage sorghum and grain sorghum, including high yield, drought tolerance and disease tolerance. We continue to invest in research and development programs in the United States, Australia, Europe and South America with an emphasis on driving trait improvement across all of our crop categories.  

• Cost-Efficient Global Supply Chain.  We produce seed in the Western United States, Canada, Australia, Europe and South Africa under contract with select third-party growers. We currently maintain approximately 200 grower relationships, many of which are longstanding. Our global, but localized, production capabilities allow us to produce seed close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that customer’s region and produced at low cost. We condition and package seed primarily in our own facilities located in California, Idaho, Texas and Australia. We believe that direct ownership of our production facility assets gives us more flexibility to react to demand changes unique to each geography, greater control over product quality and a lower cost structure.

• Global Distribution Capabilities and Relationships.We sell our seed through one of the industry’s largest networks of distributors and dealers, reaching more than 40 countries.  In the United States, we believe that our farmer-dealer network, unique among middle-market seed companies, provides a platform to support sales growth across crop categories. In Australia, we recently enhanced our sales and distribution capabilities through our recent acquisition of Pasture Genetics.

• Deep Industry Expertise.We believe that our management team has deep industry experience and a demonstrated record of success that is unmatched for a seed industry company of our size. Our leadership team includes both proven industry executives recruited to our company and top talent acquired through our various acquisitions. Mark Wong, our Chief Executive Officer, has over 40 years of senior executive experience in the agriculture industry andhas successfully built, operated, and sold multiple seed companies to industry leaders across multiple crops, including sorghum, corn, soybeans, and vegetables.  

Our goal is to be a leading multi-crop, middle-market agricultural company; delivering value to our customers and strong financial returns to our shareholders.  To reach our goal, we have prioritized the following strategic initiatives:

• Develop and Launch New Products that Address Unmet Market Needs.  We expect to introduce more than 25 new products during the 2021-2022 fiscal years across our current crop offerings. We also plan to continue development activities aimed to generate high-value, improved traits in our crops and to begin commercialization of seed products carrying those traits.  We anticipate (pending receipt of regulatory approvals) a Spring 2021 launch of sorghum hybrids incorporating our proprietary, patent-pending herbicide tolerant trait as part of our DoubleTeam™ collaboration with ADAMA.   We are also evaluating commercialization options for alfalfa seed products developed through our collaboration with Calyxt, Inc., which applied apply next generation gene-editing technology to our elite alfalfa seed genetics.

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• Build Our Multi-Channel Distribution Network and Execute on International Cross-Selling Opportunities.Our organization is aligned across geographic lines, as opposed to product lines. We believe that this structure allows us to make the best use of distribution assets like our United States farmer-dealer network and our Australian sales force (recently expanded by our acquisition of Pasture Genetics) and to unlock potential sales synergies through international cross-selling of products (particularly in Europe and Australia). We believe that a robust, diverse distribution network will allow us to continue to evolve beyond our historical dependence on certain geographical markets which carry higher political, regulatory and economic risks.

• Exploit International Production Capability for Best-In Class Cost Structure.  Our streamlined international supply chain provides us with flexibility in sourcing product to meet customer needs. We are focused on exploiting this ability to shift production to low-cost areas to both support our competitive position and improve our margins.

• Commercialize Stevia.  We believe that an opportunity exists to bring to market new stevia varieties that can both meet consumer taste requirements and have yield quality that would enable farmers to profitably grow stevia in North and South America. We plan to leverage our proprietary stevia germplasm to form collaborations and commercial agreements with supply chain partners to create a U.S.-based stevia production industry for high-quality stevia sweetener with superior taste profiles that would supply major customers in the U.S. market.

• Expand Crop Offerings and Market Share of Existing Offerings Through Strategic Acquisitions.  We expect that ongoing consolidation and realignment in the seed industry will present opportunities for us to acquire assets that are no longer a strategic fit in the product portfolios of larger industry players or that smaller industry players are unable to effectively exploit. We believe that our production and distribution platforms position us to more fully realize the potential of these types of assets. Moreover, we have a proven track record of successfully acquiring and integrating diverse operations into our seed platform and rebalancing our product portfolio. We intend to emphasize disciplined capital and resource allocation, with a strong focus on return on invested capital and evaluating opportunities to expand our crop offerings or increase our share of existing crop markets.

Our Current Crops

Alfalfa

TheAlfalfa Market.  Alfalfa seed is primarily used for growing alfalfa hay, which is grown throughout the world as “forage” for livestock, including dairy and beef cattle, horses and sheep. The alfalfa industry (and therefore the alfalfa seed industry) is highly dependent on the dairy industry, which is the largest consumer of alfalfa hay. As the global middle class expands and emerging markets adopt a diet with higher protein consumption, we expect the demand for alfalfa production around the world to increase.

We estimate that current global alfalfa hay crop production is 200 million metric tons per year and that global annual alfalfa seed sales are approximately $500 million.  

S&W’s Alfalfa Seed Portfolio.  Our current portfolio of over 210 commercialized alfalfa seed products spans both non-dormant varieties, which grow year-round, and dormant varieties, which have adapted to cold climates by going dormant during periods when frost or snow conditions would otherwise kill them. Our specialty is high-yield alfalfa varieties with a wide range of adaptation across many growing environments. Our alfalfa seed products include varieties that, depending upon the particular variety, exhibit the traits that forage hay farmers most value, such as high yield, root rot resistance, lodging resistance, salt tolerance, drought tolerance, leafhopper resistance and stem nematode resistance.

We historically have not used genetic engineering in our alfalfa breeding program, so that our products can be sold in Europe, the Middle East, Australia and other parts of the world that currently prohibit the sale of genetically modified organism (GMO) alfalfa. More recently, we have expanded our research and development efforts beyond our classically-bred proprietary alfalfa seed breeding program. One result of these efforts was our commercial release of a Roundup Ready^® alfalfa variety incorporating a herbicide resistance trait (under license from Forage

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Genetics International) into our proprietary germplasm. We also are evaluating commercialization options for alfalfa seed products developed through our collaboration with Calyxt. These potential commercial products consist of our seed varieties carrying a novel trait that is currently classified as non-GMO. While we believe these products have commercial potential, we do not anticipate a commercial launch or a meaningful contribution to our revenue before fiscal year 2023, if at all.

Sorghum

The Sorghum Market.  Sorghum comes in two types, forage and grain. While it has been traditionally used for livestock feed and in ethanol production, sorghum is gaining popularity as a substitute for wheat and other grains in food products due to its gluten-free characteristics, as well as its antioxidant, high protein, low fat, high fiber and non-GMO properties. Additionally, the pet food industry has been increasing its use of grain sorghum due to its nutritional benefits and enhanced digestibility. Sorghum requires less water to grow than many other crops and is generally used as a replacement for corn and other grains in areas where water is scarce. In Africa, sorghum is a common food staple for human consumption. The majority of the world’s sorghum is grown in developing countries, primarily in Africa and Asia.

We estimate global sorghum crop production to be 60 million metric tons per year.  We estimate that global annual sorghum seed sales are approximately $500 million.

S&W’s Sorghum Portfolio. Our current portfolio of approximately 40 commercialized sorghum seed products includes both forage and grain sorghum. We believe that many of our sorghum hybrids are unmatched and consistently out-yield competitor products in select markets.

We plan to commercially launch approximately twenty new sorghum products during the fiscal years 2021-2022, including new Sugarcane Aphid tolerant hybrids to address a significant market need. We anticipate (pending receipt of regulatory approvals) a Spring 2021 launch of sorghum hybrids incorporating our proprietary, patent-pending herbicide tolerant trait as part of our DoubleTeam™ collaboration with ADAMA.

Sunflower

The Sunflower Market.  Sunflowers have multiple uses including oil, birdseed and human consumption. Our current sunflower seed focus is on hybrids best suited for the oil market. Sunflower oil is light in taste and appearance and supplies more Vitamin E than any other vegetable oil. It is a combination of monounsaturated and polyunsaturated fats with low saturated fat levels. The versatility of this healthy oil is recognized by cooks internationally, valued for its frying performance and health benefits. With multiple types of sunflower oils available, it meets the needs of consumer and food manufacturers alike for a healthy and high performance non-transgenic vegetable oil. Additionally, sunflower is being sought after as a source of non-GMO oils.

The USDA projects global sunflower seed production for 2020/2021 at 55 million metric tons per year. We estimate that global annual sunflower seed sales are approximately $750 million to $1 billion.

S&W’s Sunflower Portfolio. We currently have six high-yield sunflower hybrids in the market. Our research and development programs in Australia and Europe focus on developing new elite sunflower seed hybrids that are disease resistant, have herbicide resistant characteristics, meet specific oil profiles, both polyunsaturated and linoleic, and maximize yield potential for different growing conditions around the world

Australian Wheat

The Wheat Market in Australia. Wheat is Australia's largest grain crop.  Australia produces around 24.3 million tons of wheat annually, with approximately 70% exported to Southeast Asian countries.

The wheat market in Australia operates under an end point royalty, or EPR, system in which the wheat variety owner earns a fixed royalty on every ton of grain produced. The applicable EPR varies by variety, but typically ranges from $2 to $4 per metric ton. Under EPR systems, variety owners such as us do not produce or hold commercial seed inventories or sell seed. Industry partners increase commercial quantities of planting seed and

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distribute to growers. Varieties are tracked along the supply chain and, when grain is ultimately delivered to the grain buyer or end user, the EPR is collected and delivered to the variety owner.

We estimate that total end point royalties paid to wheat variety owners in Australia are approximately $70 million per year.

S&W’s Wheat Portfolio.   In 2019, under an exclusive, prepaid license from Corteva Agriscience, S&W acquired rights to a group of commercialized and development wheat varieties which are the result of an estimated $17 million development program investment.   We currently have six wheat varieties commercially available in the Australian market.  Our breeding program is focused on new varieties which we believe have the potential to offer a number of benefits to Australian wheat growers as compared to existing commercial varieties, including superior disease resistance, superior yields and grain quality to suit the diverse Australian conditions.

Pasture Seeds

The Pasture Seed Market in Australia.   In addition to alfalfa, the pasture seed market in Australia includes medic, clovers, vetch, forage cereals, and certain grasses. Key customers include beef cattle, sheep and dairy farmers, and silage, hay and chaff producers.  We estimate that annual pasture seed sales in Australia are approximately $100 million.

S&W’s Pasture Seed Portfolio. After our February 2020 acquisition of Pasture Genetics, we currently offer over 300 pasture seed products in the Australian market.  

Stevia

Stevia and the Sweetener Industry.  Stevia leaf and its refined products are a natural, non-caloric high intensity sweetener.  The incorporation of stevia-derived extracts into foods and beverages in the U.S. has seen a rapid increase since the beginning of 2009, when stevia was first introduced as a sweetener alternative to sugar and approved by the FDA as generally recognized as safe.   In the U.S., approximately 70% of all new products formulated with stevia are beverages, with the remainder split between diverse categories, including dairy products and baked goods. Currently, the majority of global commercial stevia production occurs in Asia (particularly, in China), as current varieties lack adaptive characteristics that would permit farmers to profitably grow them in other global agricultural regions.

We estimate the annual market value of stevia as an additive to foods and beverages to be $565 million.

S&W’s Stevia Program.  Since 2009, our stevia research and development program has focused on developing stevia into a U.S.-grown crop.   Our program has generated four patented varieties, and we are working closely with potential supply chain collaborators and customers to develop more advanced varieties that can both meet taste requirements of consumers and have field performance that would enable farmers to profitably grow stevia in the United States.  In early 2019, we opened a dedicated stevia field breeding station in Tifton, GA to further support the breeding effort and select new varieties adapted to the Southeast growing regions targeted for initial cultivation of stevia in the United States.

Product Development

We conduct our breeding and development programs in the United States, Australia, Europe and South America.  

Our breeding programs are designed to make steady genetic improvements in our germplasm base, which we use to create better-performing varieties and hybrids for our customers. Development of a typical new variety or hybrid can take as little as five years or as long as 18 years, depending on methodology and the desired agronomic traits. Because of the many years required to develop a new variety or hybrid, we believe our successful breeding program allows us to offer seed varieties or hybrids incorporating a combination of characteristics desired by farmers that are not available from any other source, thereby providing us with a competitive advantage.

We also plan to continue development activities aimed at generating high-value improved traits in our crops. With this objective in mind, we are collaborating, and continue to look for opportunities to collaborate, with other companies that have technologies that we believe complement our proprietary products and/or our research and development breeding expertise to develop currently unavailable specialized seed products.

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Sales, Marketing and Distribution

We currently sell over 500 seed products in more than 40 countries. Our principal markets for alfalfa sales are the United States, Canada, Mexico, South America, the Middle East, North Africa, and Australia. Our sorghum sales are focused in the United States, Mexico, Australia, Europe and South Africa.   Our sunflower sales are primarily in Europe, Asia and Australia. Our wheat and pasture seed sales are focused in Australia.

Our organization is structured across geographic lines, as opposed to product lines, which we believe allows us to make the best use of distribution assets (like our U.S. farmer-dealer network and our Australian sales force) and unlock potential sales synergies through international cross-selling of products (particularly in Europe and Australia).

We primarily sell our seed products under the S&W brand or other brands we own, such as Alfalfa Partners ™ and Sorghum Partners®. To a limited extent, we also sell some seed under private-label arrangements with distributors.

Our customers are primarily distributors and dealers. Our distributors and dealers, in turn, sell to farmers. We believe that selling through dealers and distributors enables our products to reach growers in areas where there are geographic or other constraints on direct sales efforts. We select dealers and distributors based on shared vision, technical expertise, local market knowledge and financial stability. Over the years, we have built dealer/distributor loyalty through an emphasis on service, access to breeders, ongoing training and promotional material support. We limit the number of dealers and distributors with whom we have relationships in any particular area in order to provide adequate support and opportunity to those with whom we choose to do business.

Both farmers and dealers use pest-control advisors who recommend the varieties or hybrids that will produce the best results in a particular location. Therefore, a key part of our marketing strategy is to educate the consultants, as well as the farmers, as to benefits of our seed varieties and hybrids.

We believe that our best marketing tool is the dissemination of information regarding the quality and characteristics of our propriety seed products to those persons who make the growing decisions. We continue to place advertisements in trade journals, agriculture publications, social media and participate in seed industry conferences and trade shows and engage in various other educational and outreach programs as we deem appropriate.

Our sales efforts have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically our most active selling period, many national, state and local governments in our target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, we immediately attempted to shift our sales activities to video conferencing and similar customer interaction models but have found these alternative approaches to generally be less effective than in-person sales efforts, and this could result in decreased sales revenue and a negative impact on our business and financial results.

Seed Production

We produce seed in the United States, Canada, Australia, Europe and South Africa under contract with select third-party contract growers. We currently maintain over 100 grower relationships. Our network of growers has the expertise needed to successfully grow high quality seed products. We have worked with many of the same growers on a long-term basis, and we believe that we have strong relationships with them. We allocate our seed production among our growers so that we can purchase the proper mix of seed each year. Our contracts with growers have terms ranging from one to seven years, depending on the crop and the production area. Our global, but localized, production capabilities allow us to produce close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that region and is produced at the lowest cost.

We condition and package seed primarily in our own facilities located in California, Idaho, Texas and Australia; although in some markets (for example, Australia) we use third-party processing services. We believe that direct

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ownership of production facility assets gives us more flexibility to respond to demand changes unique to each geography, greater control over product quality and a lower cost structure.  

Seasonality

We contract with growers based upon our anticipated market demand. We mill, clean and stock the seed during the harvest season and ship from inventory throughout the year. However, our seed business is seasonal.  In the Northern hemisphere, production and harvest occurs from March through September and processing and shipping finished goods primarily occurs from October through May. In the Southern hemisphere, production and harvest occurs from October through March and processing and shipping primarily occurs from March through August.

Proprietary Rights

Ownership of and access to intellectual property rights are important to us. We sell proprietary seed varieties and hybrids that have been specially selected to manifest the traits we deem best suited to particular regions in which our seed is planted. Our ability to compete effectively is dependent upon the proprietary nature of the seeds, seedlings, processes, technologies and materials owned by or used by us or our growers. Our competitive position would be adversely affected if any competitors independently were to develop any technologies that substantially equal or surpass our own.

In some cases, we obtain patent protection or plant breeder rights registrations for certain of our seed products.   However, our principal method of guarding our proprietary varieties and hybrids is exercising a high degree of control over the supply chain. As part of this control process, we require our growers to deliver back to us all seed derived from our proprietary varieties and, in the case, of hybrids, limit supply of parent seed that enables hybrid production. Historically, we have found that these control mechanisms have been an effective means to protect our proprietary seed. However, because we often do not have more formal proprietary rights protections, it would be possible for persons with access to our seed or plants grown from our seed to reproduce proprietary seed, which could significantly harm our business and our reputation.

Competition

Competition in the seed industry both domestically and internationally is intense, and we believe it is intensifying with industry consolidation.  We believe that the key competitive drivers in the industry are proven performance, customer support in the field and value, which takes into account not simply the price of the seed but also yield in the field.

We face direct competition by other seed companies, including multinational agriculture companies, regional seed companies and small family-owned businesses, as well as subsidiaries or other affiliates of chemical, pharmaceutical and biotechnology companies.  Our principal competitors include:

• Alfalfa.    In the U.S. market, our principal competitors in our alfalfa seed business are Forage Genetics International (a subsidiary of Land O’ Lakes, Inc.), Pioneer and Alforex Seeds (subsidiaries of Corteva), and Pacific International Seed Company, Inc.   In the Australian market, competitors in the proprietary alfalfa seed market include the Barunbrug Group, PGG Wrightson Seeds Ltd, and Naracoorte Seeds Pty. Ltd.  In Australia, we also face competition from smaller companies offering non-proprietary seed and lower value seed from the European Union and Argentina.  

• Sorghum.   Our principal competitors in sorghum are Pioneer, DeKalb (a subsidiary of Bayer), Advanta, and Nuseed.

• Sunflower.   Our principal competitors in sunflower are Pioneer, Nuseed, Dyna-Gro Seed (a subsidiary of Nutrien Ag Solutions), Syngenta AG, Advanta, Limagrain, and KWS SAAT SE & Co.

• Australian Wheat.   Our principal competitors in the Australian wheat market are AGT, LongReach Plant Breeders Pty Ltd., and InterGrain.

• Pasture Seed.   Our principal competitors in the Australian pasture seed market are the Barunburg Group, and PGG Wrightson Seeds Ltd.

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Many of our existing and potential competitors have substantially greater research and product development capabilities and financial, marketing and human resources than we do. As a result, these competitors may:

• succeed in developing products that are equal to or superior to our products or potential products or that achieve greater market acceptance than our products or potential products;

• devote greater resources to developing, marketing or selling their products;

• respond more quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our products or potential products obsolete or less preferable;

• obtain patents that block or otherwise inhibit our ability to develop and commercialize potential products we might otherwise develop;

• withstand price competition more successfully than we can;

• establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our customers or prospective customers; and

• take advantage of acquisition or other opportunities more readily than we can.

Environmental and Regulatory Matters

Our agricultural operations are subject to a broad range of evolving environmental laws and regulations applicable to the markets in which we operate.  These environmental laws and regulations are intended to address concerns related to air quality, storm water discharge and management and disposal of agricultural chemicals relating to seed treatment.

Compliance with these laws and related regulations is an ongoing process that does not, and is not expected to, have a material effect on our capital expenditures, earnings or competitive position. Environmental concerns are, however, inherent in most major agricultural operations, including those conducted by us, and there can be no assurance that the cost of compliance with environmental laws and regulations will not be material. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals, could result in increased compliance costs.

We also are subject to various laws and regulations relating to the transport, export/import and sale of seed applicable in the markets in which operate.  

Internationally, we are subject to various government laws and regulations (including the U.S. Foreign Corrupt Practices Act and similar non-U.S. laws and regulations) and local government regulations. To help ensure compliance with these laws and regulations, we have adopted specific risk management and compliance practices and policies, including a specific policy addressing the U.S. Foreign Corrupt Practices Act.

Research and Development

Research & Development expenses for the year ended June 30, 2020 totaled $7.3 million compared to $6.3 million in the year ended June 30, 2019.

Employees

As of September 22, 2020, we had 186 total employees, of which 168 were full-time employees. We also retain consultants for specific purposes when the need arises. None of our employees are represented by a labor union.

Corporate History

From 1980 until 2009, our business was operated as a general partnership. In October 2009 we incorporated in Delaware, and in December 2011 we reincorporated in Nevada.

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Contact Information

Our principal business office is located at 2101 Ken Pratt Blvd., Suite 201, Longmont, CO 80501, and our telephone number is (720) 506-9191. Our website address is www.swseedco.com. Information contained on our website or any other website does not constitute part of this Annual Report on Form 10-K, and the inclusion of our website address in this report is an inactive textual reference only.

Item 1A. Risk Factors

Risks Relating to Our Business and Industry

The effects of health crises, including the recent COVID-19 pandemic, have had an adverse impact on our business, operations and the markets and communities in which we, our partners and customers operate.

As a result of the COVID-19 outbreak, or similar pandemics, and government responses to such pandemics, we have and may in the future experience disruptions that could adversely impact our business, including:

• We rely on third-party dealers, distributors and sales agents as our primary customers and distribution channels. These dealers, distributors and sales agents are often small businesses or sole proprietorships. Any restriction of, or disruption in, their ability to operate would adversely impact our business.

• Approximately 35% of our sales revenue depends on cross-border export of seed products from our primary production areas in the United States and Australia. Any disruption in cross-border shipments resulting, for example, from reduced capacity of the global shipping network or quarantine measures would adversely impact our business.

• Approximately 65% of our sales revenue is from dealers and distributors in the United States and Australia. Any disruption in shipments resulting, for example, from reduced capacity of the trucking and logistics network or quarantine measures would adversely impact our business.

• Our product revenue is predicated on our ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in our distribution and supply channels. Any actual or perceived disruption in the distribution channel could alter customer buying decisions, prompting customers to delay or decrease their orders, which would negatively impact our sales revenue and could harm our reputation.

• A significant portion of our sales are made in markets in which sales are otherwise sensitive to changes in local currency to US Dollar exchange rates. During the COVID-19 pandemic, we have experienced increased foreign exchange rate volatility and currency devaluation in some of our markets outside the United States. Such volatility and disruption have impacted our customers and their ability to make timely payment on previously fulfilled orders. Any such effects on our customers’ ability to pay would negatively impact our business and financial results.

• Our sales cycle is highly seasonal, and the majority of our sales season activities for the United States and Australia are typically concentrated between March and June of each calendar year. Our sales efforts have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically our most active selling period, many national, state and local governments in our target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, we immediately attempted to shift our sales activities to video conferencing and similar customer interaction models but have found these alternative approaches to generally be less effective than in-person sales efforts, and this could result in decreased sales revenue and a negative impact on our business and financial results.

• We clean, process and package our seed products in multiple facilities in the United States and Australia. Any outbreak of COVID-19 at one of our facilities could require us to close the facility until the outbreak is resolved. Any such closure could have a negative impact on our ability to meet customer orders.

• We offer our customers payment terms generally less than one year from invoicing in alignment with the growing season.  As a result of the current economic downturn associated with the COVID-19 pandemic,

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our customers may be unable to repay their obligations to us when due, which could adversely affect our results and financial condition.

• We have historically relied upon occasional sales of our debt and equity securities and borrowing under credit facilities from financial institutions, both in the United States and South Australia, to fund our operations. The COVID-19 pandemic has resulted in, and may continue to result in, significant disruption and volatility in equity and credit markets which could negatively impact our financing terms or impair our ability to access capital markets altogether, and could therefore negatively affect our liquidity.

• We are subject to various affirmative and negative covenants in our loan agreements with our lenders. If the effects of COVID-19 cause us to fall out of compliance with one or more of such covenants and we are unable to secure a waiver or negotiate an amendment to such loan agreements on reasonable terms, or at all, an event of default could occur, which would allow our lenders to accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at all. If we are unable to access funds to repay our lenders, our lenders could take control of our pledged assets. Any of the foregoing events would negatively impact our financial condition and liquidity. For example, we were not in compliance with our fixed charge coverage ratio covenant under our CIBC facility as of June 30, 2020.  On September 22, 2020, the CIBC loan agreement was amended and, among other things, CIBC waived the fixed charge coverage ratio covenant as of June 30, 2020 and suspended its applicability prospectively until the quarter ending March 31, 2021. We cannot guarantee that we will be able to comply with all of the covenants contained in the CIBC loan agreement in the future, or secure additional waivers if or when required.

• Since early March 2020, we have taken temporary precautionary measures intended to help minimize the risk of COVID-19 to our employees and their families, including temporarily allowing office and sales employees to work remotely. We have suspended non-essential travel worldwide for our employees and prohibited employee attendance at in-person gatherings. Further measures may be taken as the COVID-19 outbreak continues. The measures taken now or in the future to contain the COVID-19 pandemic could negatively affect our ability to recruit and engage new employees and contractors necessary to the successful operation of our business.

The COVID-19 pandemic continues to rapidly evolve. The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, stay-at-home or other similar orders and social distancing in the United States, Australia and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States, Australia and other countries to contain and treat the virus.

Our earnings can be negatively impacted by declining demand brought on by varying factors, many of which are out of our control.

Demand for our seed depends upon a variety of factors, including end demand for the crops grown from the seed.  For example, a severe downturn in the dairy industry could have a negative effect on sales of alfalfa hay, and as a result, the demand for our alfalfa seed in the U.S. market. In addition, demand for our products could decline because of other supply and quality issues or for any other reason, including products of competitors that might be considered superior by end users. A decline in demand for our products could have a material adverse effect on our business, results of operations and financial condition.

Our earnings may also be sensitive to fluctuations in market prices for seed.

Market prices for our seed can be impacted by factors such as the quality of the seed and the available supply, including whether lower-quality, lower-priced seed is available. Growing conditions, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests and the adventitious presence of GMO, are primary factors influencing the quality and quantity of the seed and, therefore, the market price at which we can sell our seed to our customers. A decrease in the prices received for our products could have a material adverse effect on our business, results of operations and financial condition.

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Our earnings are vulnerable to cost increases.

Future increase in costs, such as the costs of growing seed, could cause our margins and earnings to decline unless we are able to pass along the increased price of production to our customers. We may not be able to increase the price of our seed sufficiently to maintain our margins and earnings in the future.

Our inventory of seed can be adversely affected by the market price being paid for other crops.

Our seed production relies entirely on unaffiliated growers to grow our proprietary seed and to sell it to us at negotiated prices each year. Growers have a choice of what crops to plant. If a particular crop is paying a materially higher price than has been paid in the past, growers may decide to not grow our seed crops in favor of receiving a higher return from an alternative crop planted on the same acreage. If our growers decline to a significant degree to plant the acreage on which we rely, and if we cannot find other growers to plant the lost acreage, our inventory of seed could be insufficient to satisfy the needs of our customers unless we are able to procure the necessary additional seed in the market at prices we cannot control. If these circumstances occur, our business, results of operations and financial condition could materially decline. In addition, our customers could look to other suppliers for their seed if we cannot satisfy their requirements, and we may not be able to regain them as customers once our inventory levels have returned to normal.

Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.

Our seed crops are vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are common but difficult to predict. In addition, seed crops are vulnerable to crop disease and to pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied and climatic conditions. Unfavorable growing conditions can reduce both crop size and quality. Although we no longer grow any of our seed directly, these factors can still impact us by potentially decreasing the quality and yields of our seed and reducing our available inventory. These factors can increase costs, decrease revenue and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations and financial condition.

Because our seed business is highly seasonal, our revenue, cash flows from operations and operating results may fluctuate on a seasonal and quarterly basis.

Our seed business is seasonal. The seasonal nature of our operations results in significant fluctuations in our working capital during the growing and selling cycles. We have experienced, and expect to continue to experience, significant variability in net sales, operating cash flows and net income (loss) on a quarterly basis.

We have had a material concentration of revenue from a small group of customers that fluctuates, and the loss of any of these customers in any quarter could have a material adverse effect on our revenue.

On a historical basis, we have experienced a material concentration of revenue from a small group of customers. This concentration fluctuates from quarter to quarter, depending on our customer's specific requirements, which are themselves cyclical. However, in any particular quarter, we generally have a small group of customers that accounts for a substantial portion of that quarter’s revenue. Most of these customers are not contractually obligated to purchase seed from us. The loss of one or more of these customers on a quarterly basis, when taken year over year, could have a material adverse impact on our business, financial position, results of operations and operating cash flows. We could also suffer a material adverse effect from any losses arising from a major customer's disputes regarding shipments, product quality or related matters, or from our inability to collect accounts receivable from any major customer. There are no assurances that we will be able to maintain our current customer relationships or that they will continue to purchase our seed in the current projected quantities. Any failure to do so may materially adversely impact our business.

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Because we depend on a core group of significant customers, our sales, cash flows from operations and results of operations may be negatively affected if our key customers reduce the amount of products they purchase from us.

Although our customer concentration should decline as our product mix becomes more diverse, there is no assurance that we will be able to maintain the relationships with our major customers or that they will continue to purchase our seed in the quantities that we expect and rely upon. If we cannot do so, our results of operations could suffer.

Because we do not grow the seed that we sell, we are completely dependent on our network of contract growers, and our sales, cash flows from operations and results of operations may be negatively affected if we are unable to maintain an adequate network of contract growers to supply our seed requirements.

We do not directly grow any of the seed that we sell, and therefore, we are entirely dependent upon our network of growers. While we have some supply contracts with our growers of up to seven years in duration, many of our grower contracts cover only one year, which makes us particularly vulnerable to factors beyond our control. Events such as a shift in pricing caused by an increase in the value of commodity crops other than seed crops, increase in land prices, unexpected competition or reduced water availability could disrupt our supply chain. Any of these disruptions could limit the supply of seed that we obtain in any given year, adversely affecting supply and thereby lowering revenue. Such disruption could also damage our customer relationships and loyalty to us if we cannot supply the quantity of seed expected by them.

Our ability to contract for sufficient acreage presents challenges.

In order to increase revenue and earnings, we continue to need more production acreage. As we continue to increase the number of acres under contract and/or to move production into new geographical locations, we face challenges that can impede our ability to produce as much seed inventory as we have budgeted. For example, when we move production into new geographical locations, we may find it difficult to identify growers with the expertise to grow our seed crops, and we may not have sufficient company personnel available in such new locations to provide production advice on a timely basis. We also face increased competition for conventional seed acreage as the need for technology acres grows, which is further complicated by the field isolation issue relating to GMO crops that can reduce the amount of acreage available for conventional alfalfa seed crops. If we are unable to secure the acreage we need to meet our planned production for the crop year and are unable to purchase seed in the market, our results of operations could suffer, as would our reputation.

A lack of availability of water in any of our production areas could impact our business.

Adequate quantities and correct timing of the application of water are vital for most agriculture to thrive. Whether particular farms are experiencing water shortages depends, in large part, on their location. However, continuing drought conditions can threaten all farmland other than those properties with their own water sources. Foreign or domestic regulations regarding water usage and rights may also limit the availability of water. Although our current seed products are not water-intensive crops, the availability or the cost of water is a factor in the planting of the crops grown from our seed. Moreover, if the farmers and others who purchase our seed to grow crops cannot get an adequate supply of water, or if the cost of water makes it uneconomical for the farmers to grow the crops, we may not be able to sell our seed, which could have an adverse impact on our results of operations.

We face intense competition, and our inability to compete effectively for any reason could adversely affect our business.

Competition in the seed industry both domestically and internationally is intense, and we believe it is intensifying with industry consolidation. We face direct competition from other seed companies, including multinational agriculture companies, regional seed companies and small family-owned businesses, as well as subsidiaries or other affiliates of chemical, pharmaceutical and biotechnology companies, many of which have substantially greater resources than we do.

These resources give our competitors greater operating flexibility that, in certain cases, may permit them to respond better or more quickly to changes in the industry or to introduce new products more quickly and with greater marketing support. Increased competition could result in lower profit margins, substantial pricing pressure, reduced

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market share and lower operating cash flows. Price competition, together with other forms of competition, could have a material adverse effect on our business, financial position, results of operations and operating cash flows.

If we are unable to estimate our customers’ future needs accurately and to match our production to the demand of our customers, our business, financial condition and results of operations may be adversely affected.

We sell our seed primarily to dealers and distributors who, in turn, sell primarily to farmers who grow crops from the seed. Due to the nature of the seed industry, we normally produce seed according to our production plan before we sell and deliver seed to distributors and dealers. Our dealers and distributors generally make purchasing decisions for our products based on market prices, economic and weather conditions and other factors that we and our dealers and distributors may not be able to anticipate accurately in advance. If we fail to accurately estimate the volume and types of products sought by the end users and otherwise adequately manage production amounts, we may produce more seed than our dealers and distributors want, resulting in excess inventory levels. It may be difficult for us to dispose of all of our inventory on commercially reasonable terms, or at all, and we may need to record an impairment charge for a portion of this inventory in subsequent fiscal periods.  Any such impairment charge or any failure to sell inventory on commercially reasonable terms could have a material adverse effect on our business, financial position, results of operations and operating cash flows.

On the other hand, if we underestimate demand, we may not be able to satisfy our dealers and distributors' demand for seed, and thus damage our customer relations and end-user loyalty. Our failure to estimate end users’ future needs and to match our production to the demand of our customers may adversely affect our business, financial condition and results of operations.

Our third-party distributors may not effectively distribute our products.

We depend in part on third-party distributors and strategic relationships for the marketing and selling of our products. We depend on these distributors’ efforts to market our products, yet we are unable to control their efforts completely. In addition, we are unable to ensure that our distributors comply with all applicable laws regarding the sale of our products, including the United States Foreign Corrupt Practices Act of 1977, as amended. If our distributors fail to effectively market and sell our products, and in full compliance with applicable laws, our operating results and business may suffer.

We extend credit to our largest international customer and to certain of our other international customers, which exposes us to the difficulties of collecting our receivables in foreign jurisdictions if those customers fail to pay us.

Although payment terms for our export seed sales range from prepayment to 90 to 120 days, we extend credit to our largest international customer, Sorouh, and to other international customers up to 180 days. Sales of our seed to Sorouh and to other international customers represented a material portion of our revenue in historical periods and we expect that we will continue to extend credit in connection with future sales. Because these customers are located in foreign countries, collection efforts, were they to become necessary, could be much more difficult and expensive than pursuing similar claims in the United States. Moreover, future political and/or economic factors, as well as future unanticipated trade regulations, could negatively impact our ability to timely collect outstanding receivables from these important customers. The extension of credit to our international customers exposes us to the risk that our seed will be delivered but that we may not receive all or a portion of the payment therefor. If these customers are unable or unwilling to fully pay for the seed they purchase on credit, our results of operations and financial condition could be materially negatively impacted. Moreover, our internal forecasts on which we make business decisions throughout the year could be severely compromised, which could, in turn, mean that we spend capital for operations, investment or otherwise that we would not have spent had we been aware that the customer would not honor its credit extension obligation.

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Our current reliance on the seed development and production business does not permit us to spread our business risks among different business segments, and thus a disruption in our seed production or the industry would harm us more immediately and directly than if we were more diversified.

We currently operate primarily in the agricultural seed business, and we do not expect this to change materially in the foreseeable future. Without business line diversity, we will not be able to spread the risk of our operations. Therefore, our business opportunities, revenue and income could be more immediately and directly affected by disruptions from such things as drought and disease or widespread problems affecting the alfalfa, sorghum, sunflower and pasture seed markets, payment disruptions and customer rejection of our seed. If there is a disruption as described above, our revenue and earnings could be reduced, and our business operations might have to be scaled back.

If we fail to introduce and commercialize new seed products, we may not be able to maintain market share, and our future sales may be harmed.

The performance of our new seed products may not meet our customers’ expectations, or we may not be able to introduce and commercialize specific seed varieties and hybrids. Reorder rates are uncertain due to several factors, many of which are beyond our control. These include changing customer preferences, which could be further complicated by competitive price pressures, our failure to develop new products to meet the evolving demands of the end users, the development of higher-demand products by our competitors and general economic conditions. The process for new products to gain market recognition and acceptance is long and has uncertainties. If we fail to introduce and commercialize a new seed product that meets the demand of the end user, if our competitors develop products that are favored by the end users, or if we are unable to produce our existing products in sufficient quantities, our growth prospects may be materially and adversely affected, and our revenue may decline. In addition, sales of our new products could replace sales of some of our current similar products, offsetting the benefit of a successful product introduction.

The presence of GMO alfalfa in Australia or California could impact our sales.

GMO crops currently are prohibited in most of the international markets in which our proprietary seed is currently sold. There are regions in the United States, including the Pacific Northwest, where even small quantities of GMO material inadvertently interspersed with conventional (non-GMO) alfalfa seed make the seed undesirable, which causes customers to look elsewhere for their alfalfa seed requirements. The greater the use of GMO seed in California and other alfalfa seed growing regions, the greater the risk that the adventitious presence of GMO material in our seed production will occur due to pollination from hay fields or other seed fields. We regularly test for the adventitious presence of GMO in our conventional alfalfa seed, and we have seen a slight increase in the percentage of GMO presence in conventional alfalfa seed over the past several years. Our seed containing GMO material can only be sold domestically or in other jurisdictions that permit the importation of GMO alfalfa. If we are unable to isolate our conventional alfalfa seed from inadvertently being contaminated by GMO seed, we may find it more difficult to sell that seed in our key markets and we may have insufficient quantities of seed to sell internationally, either of which could materially adversely impact our revenue over time.

The stevia market may not develop as we anticipate, and therefore our continued research and development activities with respect to stevia may never become profitable to us.

There are a number of challenges to market acceptance of stevia as a natural, non-caloric sweetener. Stevia has its own unique flavor, which can affect the taste of some foods and beverages. A common complaint about stevia is that some of its extracts and derivatives have a bitter aftertaste, and its taste does not uniformly correspond to all regional taste preferences or combine well with some food flavors. Other factors that could impact market acceptance include the price structure compared to other sugar substitutes and availability. If the high-intensity, non-caloric sweetener market declines or if stevia fails to achieve substantially greater market acceptance than it currently enjoys, we might never be able to profit from our continued research and development activities relating to stevia or any commercial applications that we derive therefrom. Even if products conform to applicable safety and quality standards, sales could be adversely affected if consumers in target markets lose confidence in the safety, efficacy and quality of stevia. Adverse publicity about stevia or stevia-based products may discourage consumers from buying products that contain stevia. Any of these developments could adversely impact the future amount of dry leaf stevia, processed stevia leaves or extract we are able to sell, which could adversely impact our results of operations.

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The loss of key employees or the failure to attract qualified personnel could have a material adverse effect on our ability to run our business.

The loss of any of our current executives, key employees or key advisors, or the failure to attract, integrate, motivate and retain additional key employees, could have a material adverse effect on our business. Although we have employment agreements with our executive officers, as well as certain other employees, all of our employees are employed “at-will” and could leave our employ at any time. We do not carry “key person” insurance on the lives of any of our management team. As we develop additional capabilities, we may require more skilled personnel who must be highly skilled and have a sound understanding of our industry, business or processing requirements. Recruiting skilled personnel is highly competitive. Although to date we have been successful in recruiting and retaining qualified personnel, there can be no assurance that we will continue to attract and retain the personnel needed for our business. The failure to attract or retain qualified personnel could have a material adverse effect on our business.

We may not be able to manage expansion of our operations effectively.

We expect our operations to continue to grow in the future, both as we expand our historical alfalfa seed business both domestically and internationally through internal growth and synergistic acquisitions and increase our growers’ production. These efforts will require the addition of employees, expansion of facilities and greater oversight, perhaps in diverse locations. If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities, execute on our business strategies or respond to competitive pressures, and we may have difficulties maintaining and updating the internal procedures and the controls necessary to meet the planned expansion of our overall business.

Our management will also be required to maintain and expand our relationships with customers, suppliers and other third parties as well as attract new customers and suppliers. We expect that our sales and marketing costs will increase as we grow our product lines and as we increase our sales efforts in new and existing markets. Our current and planned operations, personnel, systems and internal procedures and controls may not be adequate to support our future growth.

We may be unable to successfully integrate the businesses we have recently acquired and may acquire in the future with our current management and structure.

As part of our growth strategy, we have acquired and may continue to acquire additional businesses, product lines or other assets. We may not be able to locate or make suitable acquisitions on acceptable terms, and future acquisitions may not be effectively and profitably integrated into our business. Our failure to successfully complete the integration of the businesses we acquire could have an adverse effect on our prospects, business activities, cash flow, financial condition, results of operations and stock price. Integration challenges may include the following:

• assimilating the acquired operations, products and personnel with our existing operations, products and personnel;

• estimating the capital, personnel and equipment required for the acquired businesses based on the historical experience of management with the businesses with which they are familiar;

• minimizing potential adverse effects on existing business relationships with other suppliers and customers;

• developing and marketing the new products and services;

• entering markets in which we have limited or no prior experience; and

• coordinating our efforts throughout various distant localities and time zones.

In connection with any such transactions, we may also issue equity securities, incur additional debt, assume contractual obligations or liabilities or expend significant cash.  Such transactions could harm our operating results and cash position and negatively affect the price of our stock.

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For example, on February 24, 2020, we completed the acquisition of all of the issued and outstanding shares of Pasture Genetics. We cannot guarantee that the Pasture Geneticsacquisition will yield the results we have anticipated. In addition, there can be no assurance that we will achieve the revenues, growth prospects and synergies expected from this acquisition, our prior acquisitions or any future acquisitions, or that we will achieve such revenue, growth prospects and synergies in a manner consistent with our expectations. Our failure to do so could adversely affect our business, operating results and financial condition.

The diversion of management's attention and costs associated with acquisitions may have a negative impact on our business.

If management’s attention is diverted from the management of our existing businesses as a result of its efforts in evaluating and negotiating new acquisitions and strategic transactions, the prospects, business activities, cash flow, financial condition and results of operations of our existing businesses may suffer. We also may incur unanticipated costs in connection with pursuing acquisitions and strategic transactions, whether they ultimately are consummated or not.

S&W Australia's alfalfa seed grower pool is dependent on a limited number of milling facilities to process its seed, with particular dependence on a dominant operator whose commercial interests may be adverse to S&W Australia.

Only five milling facilities are regularly used by S&W Australia’s grower pool to clean and process S&W Australia alfalfa seed. Should one or more of these facilities become unusable, there could be a significant effect on S&W Australia’s ability to get its Australian alfalfa seed to market in a timely manner or at all. S&W Australia’s growers use Tatiara to process approximately 70% of the seed grown for S&W Australia. The owner of Tatiara has begun to sell his own common seed and is now both a supplier and competitor of S&W Australia. This competing seed business creates a potential conflict of interest for Tatiara in the care and handling of S&W Australia’s product and could impact S&W Australia’s ability to have seed available to sell on the time schedule required by our customers.

S&W Australia is thinly capitalized and may become dependent upon us for financing.

Because S&W Australia has relatively little net working capital, it is substantially dependent upon its credit arrangement with National Australia Bank Ltd, or NAB, to purchase its seed inventory. If S&W Australia breaches its credit arrangement in the future or other reasons cause this credit arrangement to become unavailable to S&W Australia, S&W Australia may become reliant on us to finance its operations or for financial guarantees. We currently are a guarantor on S&W Australia's NAB credit facility. S&W Australia's financial dependency upon us could have a negative adverse effect upon our financial condition.

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S&W Australia is dependent on a pool of seed growers and a favorable pricing model for alfalfa seed production.

S&W Australia relies on a pool of approximately 100 Australian contract growers to produce its proprietary alfalfa seeds. In this system, growers contract with S&W Australia to grow S&W Australia’s seed for terms of seven to ten years in the case of alfalfa and two to three years for white clover. S&W Australia uses a staggered payment system with the growers of its alfalfa and white clover; the payment amounts are based upon an estimated budget price, or EBP, for compliant seed. EBP is a forecast of the final price that S&W Australia believes will be achieved taking into account prevailing and predicted market conditions at the time the estimate is made. Following the grower’s delivery of uncleaned seed to a milling facility, S&W Australia typically pays 40% of the EBP to the grower based on pre-cleaning weight. Following this initial payment and prior to the final payment, S&W Australia makes a series of scheduled progress payments and, if applicable, a bonus payment for “first grade” alfalfa seed. The final price payable to each grower (and therefore the total price) is dependent upon and subject to adjustment based upon the clean weight of the seed grown, on the average price at which S&W Australia sells the pooled seed and other costs incurred by S&W Australia. Accordingly, the total price paid by S&W Australia to its growers may be more or less than the EBP. This arrangement exposes S&W Australia’s business to unique risks, including, the potential for current growers to make collective demands that are unfavorable to S&W Australia and the potential for our competitors to offer more favorable terms for seed production, including fixed (instead of variable) payment terms.

S&W Australia’s reliance upon an estimated purchase price to growers could result in changes in estimates in our consolidated financial statements.

S&W Australia does not fix the final price for alfalfa and clover seed payable to its growers until the completion of a given year’s sales cycle, pursuant to the standard contract production agreement. We record an estimated unit price, and accordingly, inventory, cost of goods sold and gross profits are based upon management’s best estimate of the final purchase price to our S&W Australia growers. To the extent the estimated purchase price varies from the final purchase price for seed, the adjustment to actual could materially impact the results in the period when the difference between estimates and actuals are identified. If the actual purchase price is in excess of our estimated purchase price, this would negatively impact our financial results, including a reduction in gross profits and net income.

Changes in government policies and laws could adversely affect international sales and therefore our financial results.

Historically, sales to our distributors who sell our proprietary alfalfa seed varieties outside the United States have constituted a meaningful portion of our annual revenue. We anticipate that sales into international markets will continue to represent a meaningful portion of our total sales and that continued growth and profitability will require further international expansion, particularly in the Middle East and Africa. Our financial results could be affected by changes in trade, monetary and fiscal policies, laws and regulations, or other activities of U.S. and non-U.S. governments, agencies and similar organizations. These conditions include but are not limited to changes in a country’s or region’s economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights in some countries, changes in the regulatory or legal environment, burdensome taxes and tariffs and other trade barriers. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities and war, could lead to reduced distribution of our products into international markets and reduced profitability associated with such sales.

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We are subject to risks associated with doing business globally.

Our operations, both inside and outside the United States, are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies. Although we sell seed to various regions of the world, a significant percentage of our sales outside the United States in fiscal year 2020 were principally to customers in the Middle East, Australia, North Africa and Mexico. Accordingly, developments in those parts of the world generally have a more significant effect on our operations than developments in other places. Our operations outside the United States are subject to special risks and restrictions, including, without limitation:  fluctuations in currency values and foreign-currency exchange rates; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad, including the U.S. Foreign Corrupt Practices Act and the trade sanctions laws and regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Control. Acts of terror or war may impair our ability to operate in particular countries or regions, and may impede the flow of goods and services between countries. Customers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodity at prevailing international prices, and we may be unable to collect receivables from such customers. Further, changes in exchange rates may affect our net earnings, the book value of our assets outside the United States and our stockholders’ equity. Failure to comply with the laws and regulations that affect our global operations could have an adverse effect on our business, financial condition or results of operations.

Failure to comply with the United States Foreign Corrupt Practices Act or similar laws could subject us to penalties and other adverse consequences.

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies, including their suppliers, distributors and other commercial partners, from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in the countries in which we distribute products. We have adopted formal policies and procedures designed to facilitate compliance with these laws. If our employees or other agents, including our distributors or suppliers, are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

Environmental regulation affecting our seed products could negatively impact our business.

Our agricultural operations are subject to a broad range of evolving environmental laws and regulations applicable to the markets in which we operate. These environmental laws and regulations are intended to address concerns related to, among other things, air quality, storm water discharge and management and disposal of agricultural chemicals relating to seed treatment.

In the U.S., we are subject to evolving environmental laws and regulations by federal and state governments. Federal laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Federal Seed Act, and potentially regulations of the FDA and/or other State regulatory agencies.

Our Australian operations are also subject to a number of environmental laws, regulations and policies, including in particular the Environment Protection Act 1993 (SA), the Agricultural and Veterinary Products (Control of Use) Act 2002 (SA), the Genetically Modified Crops Management Act 2004 (SA), the Dangerous Substances Act 1979 (SA), the Controlled Substances Act 1984 (SA) and related regulations and policies.

Our failure to comply with these laws and related regulations could have an adverse effect on our business, financial condition or results of operations. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals, could result in increased compliance costs which, in turn, could have a material adverse effect on our business, financial condition or results of operations.

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If we are unable to obtain government approvals for certain of our products, we may be unable to commercialize those products in certain markets.

Our ability to launch and commercialize certain new products is subject to regulatory approval, which can be lengthy, costly, complex and in some markets unpredictable. For example, the timing of our anticipated launch of sorghum hybrids developed through our DoubleTeam^TM collaboration with ADAMA will depend on our receipt of regulatory approval. Seed products incorporating biotechnology derived traits and crop protection products must be extensively tested for safety, efficacy and environmental impact before they can be registered for production, use, sale or commercialization in a given market. Obtaining and maintaining regulatory approvals requires submitting a significant amount of information and data, which may require participation from technology providers. If we are unable to receive the necessary approvals, we will be unable to produce and sell certain of our current and future products, which may have a material adverse effect on our business, financial condition and results of operations.

Unauthorized access to our information technology systems, infrastructure and data could have a material adverse effect on our business, financial condition or results of operations.

We are dependent upon our own and third-party information technology systems, infrastructure and data, including mobile technologies, to operate our business. The multitude and complexity of our computer systems may make them vulnerable to service interruption or destruction, disruption of data integrity, malicious intrusion, or random attacks. Likewise, data privacy or security incidents or breaches by employees or others may pose a risk that sensitive data, including our intellectual property, trade secrets or personal information of our employees, customers or other business partners may be exposed to unauthorized persons or to the public. Our business partners face similar risks and any security breach of their systems could adversely affect our security posture.

In addition, cyber-attacks are increasing in their frequency, sophistication and intensity. Cyber-attacks could include the deployment of harmful malware, denial-of-service, social engineering and other means to affect service reliability and threaten data confidentiality, integrity and availability. Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property. 

A security breach, including, for example, a misappropriation of customer, distributor or employee confidential information, trade secrets or intellectual property, could disrupt our business and result in increased costs or loss of revenue, which may include potential costs of investigations, legal, forensic and consulting fees and expenses, costs and diversion of management’s attention required for investigation, remediation and litigation, substantial repair or replacement costs. In addition, any disruption in our information technology systems, loss of data or other disruptions could impair our ability to manage inventories, process transactions and communicate with our customers, which could prevent us from being able to fulfill orders, result in cancelations and loss of customers, cause us reputational harm and generally disrupt our ability to conduct our business, any of which could have a material adverse effect on our business, financial condition or results of operations.

While we have implemented measures for the protection of our data and information technology infrastructure, there can be no assurance that our efforts will prevent service interruptions, or identify breaches in our systems, that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm to us. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

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Insurance covering defective seed claims may become unavailable or be inadequate.

Defective seed could result in insurance claims and negative publicity. Although we carry general liability insurance to cover defective seed claims, such coverage may become unavailable or be inadequate. Even if coverage is offered, it may be at a price and on terms not acceptable to us. If claims exceed coverage limits, or if insurance is not available to us, the occurrence of significant claims could have a material adverse effect on our business, results of operations and financial condition.

We may be exposed to product quality claims, which may cause us to incur substantial legal expenses and, if determined adversely against us, may cause us to pay significant damage awards.

We may be subject to legal proceedings and claims from time to time relating to our seed or stevia quality. The defense of these proceedings and claims can be both costly and time consuming and may significantly divert efforts and resources of our management personnel. An adverse determination in any such proceeding could subject us to significant liability and damage our market reputation and prevent us from achieving increased sales and market share. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase of our products.

Capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our growers and customers.

The capital and credit markets have experienced increased volatility and disruption over the past several years, making it more difficult for companies to access those markets. Although we believe that our operating cash flows, historical access to the capital market and our lines of credit will permit usto meet our financing needs for the foreseeable future, continued or increased volatility and disruption in the capital and credit markets may impair our liquidity or increase our costs of borrowing, if we need to access the credit market. Our business could also be negatively impacted if our growers or customers experience disruptions resulting from tighter capital and credit markets or a slowdown in the general economy.

If we are unable to protect our intellectual property rights, our business and prospects may be harmed.

Our ability to compete effectively is dependent upon the proprietary nature of the seeds, seedlings, processes, technologies and materials owned by or used by us or our growers. If any competitors independently develop new traits, seeds, seedlings, processes or technologies that customers or end users determine are better than our existing products, such developments could adversely affect our competitive position.

In some cases, we obtain patent protection or plant breeder rights registrations for certain of our seed products.   However, our principal method of guarding our proprietary varieties and hybrids is exercising a high degree of control over the supply chain.  We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Although we require our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Even with these measures in place, it would be possible for persons with access to our seed or plants grown from our seed to reproduce and market products substantially similar to our proprietary seed varieties, which could significantly harm our business and our reputation.  Third parties may challenge the validity, enforceability and scope of our intellectual property rights.  Furthermore, we sell our products in more than 30 countries and the laws of some countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. Litigation may be necessary to protect our proprietary property and determine the validity and scope of the proprietary rights of competitors. Intellectual property litigation could result in substantial costs and diversion of our management and other resources. If we are unable to successfully protect our intellectual property rights, our competitors could market products that compete with our proprietary products without obtaining a license from us.

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Risks Related to our Financial Position and Investment in Our Securities

The terms of our loan and security agreement with CIBC place restrictions on our operating and financial flexibility, and failure to comply with covenants or to satisfy certain conditions may result in acceleration of our repayment obligations and foreclosure on our pledged assets, which could significantly harm our liquidity, financial condition, operating results, business and prospects and cause the price of our securities to decline.

Our $25.0 million revolving credit facility with CIBC Bank USA, or CIBC, is secured by a first priority perfected security interest in substantially all of our assets, subject to certain exceptions.

Our loan agreement with CIBC requires us to comply with certain financial covenants, including a specified fixed charge ratio tested quarterly.  The loan agreement also requires us to comply with a number of other covenants (affirmative and negative), including restrictive covenants that limit our ability to, among other things, incur additional indebtedness; merge or consolidate with or into any other organization or otherwise suffer a change in control; acquire, own or make investments; repurchase or redeem any class of stock or other equity interest; declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest; and transfer a material portion of our assets, in each case subject to exceptions.

In addition to other specified events of default, and subject to limited exceptions, CIBC could declare an event of default upon our non-compliance with certain covenants or the occurrence of certain events that it may determine, in its sole discretion, to have a material adverse effect, including: a material adverse change in, or a material adverse effect on our business, property, assets or operations, taken as a whole; a material impairment of our ability to perform any of our obligations under the loan agreement; a material adverse effect upon the collateral for the loan or its value; or a material impairment of the enforceability or priority of the liens upon the collateral for the loan or the legality, validity, binding effect or enforceability of the loan agreement or related agreements.

If we default under the credit facility, CIBC may accelerate all of our repayment obligations, which may require us to seek additional or alternate financing and/or modify our operational plans. For example, we were not in compliance with our fixed charge coverage ratio covenant under our CIBC facility as of June 30, 2020.  On September 22, 2020, the CIBC loan agreement was amended and, among other things, CIBC waived the fixed charge coverage ratio covenant as of June 30, 2020 and suspended its applicability prospectively until the quarter ending March 31, 2021.  Commencing with the quarter ending September 30, 2020, through and including December 31, 2020, the amendment provides that we must comply with a financial covenant requiring us to maintain year-to-date EBITDA (as calculated in the Loan Agreement) of no less than negative $6,000,000, tested quarterly. We cannot guarantee that we will be able to comply with all of the covenants contained in the CIBC loan agreement in the future, or secure additional waivers if or when required.  If we are unable to comply with or obtain a waiver of any noncompliance under the loan agreement, CIBC could declare an event of default or require us to further renegotiate the loan agreement on terms that may be significantly less favorable to us, or we may be required to seek additional or alternative financing. If we were to seek additional or alternative financing, any such financing may not be available to us on commercially reasonable terms or at all. If we are unable to access funds to meet those obligations or to renegotiate our agreement, CIBC could foreclose on our pledged assets and we would have to immediately cease operations. In addition, during the continuance of an event of default, the then-applicable interest rate on the then-outstanding principal balance is subject to increase. Upon an event of default, CIBC could also require us to repay the loan immediately, together with a prepayment penalty, and other fees. If we were to renegotiate the agreement under such circumstances, the terms may be significantly less favorable to us. If we were liquidated, CIBC’s right to repayment would be senior to the rights of our stockholders to receive any proceeds from the liquidation. Any declaration by CIBC of an event of default could significantly harm our liquidity, financial condition, operating results, business, and prospects and cause the price of our securities to decline.

We may incur additional indebtedness in the future. The debt instruments governing such indebtedness may contain provisions that are as, or more, restrictive than the provisions governing our existing indebtedness. If we are unable to repay, refinance or restructure our indebtedness when payment is due, CIBC could proceed against the collateral or force us into bankruptcy or liquidation.

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We received a loan under the Paycheck Protection Program of the CARES Act and our receipt of this loan may result in adverse publicity, damage to our reputation or potential penalties.

We have received loan proceeds pursuant to the Paycheck Protection Program under the CARES Act. The lack of clarity regarding loan eligibility under the Paycheck Protection Program has resulted in significant media coverage and controversy with respect to public companies applying for and receiving loans. If, despite our good-faith belief that we satisfied all eligible requirements for the loan, we are later determined to be in violation of any of the laws or governmental regulations that apply to us in connection with the loan, such as the False Claims Act, or it is otherwise determined that we were ineligible to receive the loan, we may be subject to penalties, including significant civil, criminal and administrative penalties and could be required to repay the loan in its entirety. In addition, we could become subject to adverse publicity, review or audit by the SBA or other government entity or claims under the False Claims Act and could consume significant financial and management resources. Any of these events could have a material adverse effect on our business, results of operations and financial condition.

We may need to raise additional capital in the future.

From time to time, we may find it necessary or advisable to raise additional capital in the future, whether to enhance our working capital, to repay indebtedness, to fund acquisitions or for other reasons. This may include, for example, the need to finance our cash needs through a combination of equity and debt financings, as well as potentially entering into collaborations, strategic alliances and licensing arrangements. If we are required or desire to raise additional capital in the future, such additional financing may not be available on favorable terms, or available at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest could be diluted and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may be secured by all or a portion of our assets. If we fail to obtain additional capital as and when required, such failure could have a material impact on our business, results of operations and financial condition.

The value of our common stock can be volatile.

Our common stock is listed on the Nasdaq Capital Market. The overall market and the price of our common stock can fluctuate greatly. The trading price of our common stock may be significantly affected by various factors, including but not limited to:

• economic status and trends in the dairy industry, which underlies demand for our alfalfa seed;

• market conditions for alfalfa seed in the Middle East and North Africa, where a substantial amount of our seed historically has been purchased by end users;

• quarterly fluctuations in our operating results;

• our ability to meet the earnings estimates and other performance expectations of investors or financial analysts;

• fluctuations in the stock prices of our peer companies or in stock markets in general; and

• general economic or political conditions.

Our quarter-to-quarter performance may vary substantially, and this variance, as well as general market conditions, may cause the price of our securities to fluctuate greatly and potentially expose us to litigation.

Our seed business is highly seasonal because it is tied to the growing and harvesting seasons. If sales in particular quarters are lower than expected, our operating results for these quarters could cause our share price to decline.

Our future expense estimates are based, in large part, on estimates of future revenue, which is difficult to predict. We expect to continue to make significant expenditures in order to expand production, sales, marketing and processes. We may be unable to, or may elect not to, adjust spending quickly enough to offset any unexpected

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revenue shortfall. If our increased expenses are not accompanied by increased revenue in the same quarter, our quarterly operating results would be harmed.

In one or more future quarters, our results of operations may fall below the expectations of investors or analysts, and the trading price of our securities may decline as a consequence. We believe that quarter-to-quarter comparisons of our operating results will not be a good indication of our future performance and should not be relied upon to predict the future performance of our stock price.

In the past, companies that have experienced volatility in the market price of their stock have often been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.

If we issue shares of preferred stock, the holdings of those owning our common stock could be diluted or subordinated to the rights of the holders of preferred stock.

Our board of directors is authorized by our articles of incorporation to establish classes or series of preferred stock and fix the designation, powers, preferences and rights of the shares of each such class or series without any further vote or action by our stockholders. Any shares of preferred stock so issued could have priority over our common stock with respect to dividend or liquidation rights.

Our actual operating results may differ significantly from our guidance.

We routinely release annual guidance in our quarterly earnings releases, our quarterly earnings conference calls and in other forums we consider appropriate. Such guidance regarding our future performance represents our management's estimates as of the date of release or other communication. This guidance, which includes forward-looking statements, is based on projections prepared by our management. These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered public accountants nor any other independent expert or outside party compiles or examines the projections, and accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.

Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. If we issue guidance, we will generally state possible outcomes as high and low ranges or approximations that are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges or approximations. The principal reason that we would release guidance would be to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance, when given, is only an estimate of what management believes is realizable as of the date of release or other communication. Actual results will vary from our guidance, and the variations may be material. In light of the foregoing, investors are urged not to rely upon, or otherwise consider, our guidance in making an investment decision about our securities.

We do not anticipate declaring any cash dividends on our common stock.

We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future. Our current policy is to retain all funds and any earnings for use in the operation and expansion of our business. If we do not pay cash dividends, our stock may be less valuable to investors because a return on their investment will only occur if our stock price appreciates.

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Anti-takeover provisions and our right to issue preferred stock could make a third-party acquisition of us difficult.

Our articles of incorporation and bylaws contain provisions that would make it more difficult for a third party to acquire control of us, including a provision that our board of directors may issue preferred stock without stockholder approval. In addition, certain anti-takeover provisions of Nevada law, if and when applicable, could make it more difficult for a third party to acquire control of us, even if such change in control would be beneficial to our stockholders.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

The following is a description of our material properties:

Location	Size	Primary Use	Leased or Owned
Dumas (Moore County), Texas	9,021 sq. ft.	Warehouse storage	Owned by S&W
Five Points (Fresno County), California	5 acres	Milling facilities	Owned by S&W
Kern County, California	584 acres	Farmland suitable for farming alfalfa seed and alfalfa hay	Leased by S&W
Keith, South Australia	8.2 acres	Processing facility	Owned by S&W Australia
Keith, South Australia	38 acres	Research farm	Leased by S&W Australia
Longmont (Boulder County), Colorado	8,948 sq. ft.	Corporate Headquarters for S&W	Leased by S&W
Lubbock (Lubbock County), Texas	41,380 sq. ft.	Research facilities and warehouse storage	Leased by S&W
Lubbock (Lubbock County), Texas	1,972 sq. ft.	Laboratory and general office	Leased by S&W
Nampa (Canyon County), Idaho	80 acres (approx.)	Alfalfa research and development facilities	Owned by S&W
Nampa (Canyon County), Idaho	16 acres	Milling facilities	Owned by S&W
Nampa (Canyon County), Idaho	8,000 sq. ft.	Production warehouse storage	Leased by S&W
Nampa (Canyon County), Idaho	7,500 sq. ft.	Production warehouse storage	Leased by S&W
New Deal (Lubbock County), Texas	111,062 sq. ft.	Processing facility and production warehouse storage	Owned by S&W
Penfield, South Australia	43,000 sq. ft.	Warehousing and production storage and research and development	Leased by S&W Australia
Stirling, South Australia	1,690 sq. ft.	Corporate headquarters for S&W Australia	Leased by S&W Australia
Szeged, Hungary	4,191 sq. ft.	Corporate headquarters for S&W Hungary	Leased by S&W Hungary
Szeged, Hungary	13 acres	Research farm	Leased by S&W Hungary
Tamworth, New South Wales	970 sq. ft.	Research and development	Leased by S&W Australia
Tifton (Tift County), Georgia	3,000 sq. ft.	Research facilities	Leased by S&W
Victoria (Victoria County), Texas	2,400 sq. ft.	Research facilities and warehouse storage	Leased by S&W
Wingfield, South Australia	17,200 sq. ft.	Warehousing and production storage	Leased by S&W Australia

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We believe that our current facilities are adequate for our needs for the immediate future and that, should it be needed, suitable additional space will be available to accommodate expansion of our operations on commercially reasonable terms.

Item 3. Legal Proceedings

From time to time, we are involved in lawsuits, claims, investigations and proceedings, including pending opposition proceedings involving patents that arise in the ordinary course of business. There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information Regarding Our Common Stock

Our common stock is traded on the Nasdaq Capital Market under the symbol “SANW.” The following table sets forth the range of high and low sales prices per share of common stock as reported on Nasdaq for the periods indicated. The closing price of our common stock on September 22, 2020 was $2.83.

	High		Low
Year Ended June 30, 2019
First Quarter	$	3.40	$	2.35
Second Quarter		3.19		1.81
Third Quarter		3.20		1.83
Fourth Quarter		3.02		2.32
Year Ended June 30, 2020
First Quarter	$	3.13	$	2.21
Second Quarter		2.57		1.92
Third Quarter		3.00		1.75
Fourth Quarter		2.50		1.67

Holders

As of September 23, 2020, we had 33,450,569 shares of common stock outstanding held by 38 stockholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant. In addition, our loan agreement with CIBC contains restrictions on our ability to pay dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

There were no unregistered sales of equity securities in 2020 fiscal year that have not been previously reported on a Current Report on Form 8-K.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

There were no unregistered sales of equity securities in 2020 fiscal year that have not been previously reported on a Current Report on Form 8-K.

Purchases of Equity Securities by the Issuer and Affiliate Purchasers

None.

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Item 6. Selected Financial Data

As a smaller reporting company, we are not required to provide information typically disclosed under this item.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8, “Financial Statements” of this Annual Report on Form 10-K. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as referred to on page 2 of this Annual Report on Form 10-K. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.”

Executive Overview

We are a global multi-crop, middle-market agricultural company. We are market leaders in the breeding, production and sale of alfalfa seed and sorghum seed. We also have a growing commercial market presence in sunflower, wheat and pasture seed and maintain an active stevia development program.  

Our seed platform develops and supplies high quality germplasm designed to produce higher yields for farmers worldwide. We sell over 500 seed products in more than 40 countries. We maintain an active product pipeline and expect to introduce more than 25 new products during the 2021-2022 fiscal years.

Founded in 1980, we began our operations as a limited producer of non-dormant alfalfa seed varieties bred for warm climates and high-yields, including varieties that can thrive in poor, saline soils. Over the years we have built a diversified, global agricultural platform through a combination of organic growth and strategic acquisitions and collaborations, including:

• Our 2012 acquisition of Imperial Valley Seeds, Inc., which enabled us to expand production of non-GMO alfalfa seed into California's Imperial Valley, thereby ensuring a non-GMO uncontaminated source of alfalfa seed due to the prohibition on growing GMO crops in the Imperial Valley, as well as enabling us to diversify our production areas and distribution channels;

• Our 2012 acquisition of a portfolio of dormant alfalfa germplasm, which launched our entry into the dormant alfalfa market;

• Our 2013 acquisition of Seed Genetics International Pty Ltd (now S&W Seed Company Australia Pty Ltd, or S&W Australia), the leading producer of non-dormant alfalfa seed in South Australia, which made us the largest non-dormant alfalfa seed company in the world, with production capabilities in both hemispheres;

• Our 2014 acquisition of alfalfa production and research facility assets and conventional (non-GMO) alfalfa germplasm from Pioneer Hi-Bred International, Inc., or Pioneer (now a subsidiary of Corteva Agriscience, Inc., or Corteva), which substantially broadened and improved our dormant alfalfa germplasm portfolio and deepened our production, research and product development capabilities;

• Our 2016 acquisition of the business and assets of SV Genetics Pty Ltd, a developer of proprietary hybrid sorghum and sunflower seed germplasm, which expanded our crop focus into two areas which we believe have high global growth potential;

• Our 2018 acquisition of the assets of Chromatin, Inc. and related companies, which positioned us to become a global leader in the hybrid sorghum seed market and enhanced our distribution channels both internationally and within a U.S.-based farmer-dealer network;

• Our 2018 joint venture with AGT Foods Africa Proprietary Limited and 2019 joint venture with Zaad Holdings Limited, both based in South Africa, each of which were formed to produce our hybrid sunflower, grain sorghum and forage sorghum seed in Africa for sale in Africa, the Middle East and Europe;

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• Our May 2019 restructuring of our relationship with Pioneer, a subsidiary of Corteva, which we jointly refer to as Corteva, under which, among other things:

o We received $45.0 million in May 2019, $5.55 million in September 2019, $5.55 million in January 2020, $5.55 million in February 2020, $3.75 million in September 2020 and are entitled to receive an aggregate of $4.6 million in additional payments on the dates and in the amounts as set forth below.

Date	Payment Amount
January 15, 2021	$	2,500,618
February 15, 2021	$	2,100,519
Total	$	4,601,137

o Corteva received a fully pre-paid, exclusive license to produce and distribute certain of our alfalfa varieties world-wide (except South America). The licensed varieties include certain of our existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. Corteva received no license to our other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by us.

o We assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.

o Our prior Distribution Agreement, related to conventional (non-GMO) alfalfa varieties, and Contract Alfalfa Production Services Agreement, related to GMO-traited alfalfa varieties, with Corteva both terminated.  Under the Distribution Agreement, Corteva was obligated to make minimum annual purchases from us.

• Our 2019 license of commercialized and developmental wheat germplasm from Corteva, through which we entered the largest grain crop market in Australia;

• Our 2020 acquisition of Pasture Genetics Ltd., or Pasture Genetics, the third largest pasture seed company in Australia, which further diversified our product offerings in Australia and strengthened our Australian sales team and distribution relationships;

• Our 2020 collaboration with ADAMA Ltd., or ADAMA, a subsidiary of China National Chemical Engineering Co Ltd., or ChemChina, to bring to the U.S. sorghum market the DoubleTeam™ grassy weed management system, consisting of ADAMA’s proprietary herbicides and our non-GMO, herbicide tolerant sorghum hybrids; and

• Our 2020 licensing agreement with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, IN, to develop and commercialize worldwide a non-GMO, dhurrin-free trait in sorghum species, which essentially eliminates potential livestock death from hydrogen cyanide poisoning when grazing sorghum

As a result of the 2018 Chromatin acquisition, the 2019 restructuring of our relationship with Corteva and our February 2020 acquisition of Pasture Genetics, we expect that our results of operations for fiscal 2021 and future periods will differ significantly from prior periods as the mix of our product portfolio rebalances away from a reliance on alfalfa sales (sales of alfalfa seed to Corteva totaled $19.7 million and $37.6 million during the years ended June 30, 2020 and 2019, respectively) to a more diverse product mix. We expect to generate alfalfa seed revenue of approximately $15 million from Corteva over the fiscal 2021 period as the seed is delivered to Corteva through February 2021.  We do not expect any other significant revenue from sales to Corteva in the future.

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COVID-19 Update

We are closely monitoring the impact of the COVID-19 global pandemic on our business and have implemented measures designed to protect the health and safety of our workforce, including a voluntary work-from-home policy for employees who can perform their jobs offsite. We are continuing our activities and are taking precautionary measures to protect our employees working in our facilities.  

As the COVID-19 pandemic continues to affect the areas in which we operate, we believe the outbreak could have a negative impact on our sales, operating results and financial condition. The extent of the impact of the COVID-19 pandemic on our sales, operating results and financial condition will depend on certain developments, including the duration and spread of the outbreak, impact on our customers, employees and vendors, all of which are uncertain and cannot be predicted.

In particular, our sales cycle is highly seasonal, and the majority of our sales season activities for the United States and Australia are typically concentrated between March and June of each year. Our sales efforts also have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically our most active selling period, many national, state and local governments in our target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, we immediately attempted to shift our sales activities to video conferencing and similar customer interaction models, but we have found these alternative approaches to generally be less effective than in-person sales efforts.

In addition, our product revenue is predicated on our ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in our distribution and supply channels. If our customers delay or decrease their orders due to potential disruptions in our distribution and supply channels, this would adversely affect our product revenue.

Given these uncertainties, at this time we cannot reasonably estimate the overall impact of the COVID-19 pandemic on our business, operating results and financial condition.

Components of Our Statements of Operations Data

Revenue and Cost of Revenue

Product and Other Revenue

We derive most of our revenue from the sale of our proprietary seed varieties and hybrids. We expect that over the next several years, a substantial majority of our revenue will be generated from the sale of alfalfa, sorghum, sunflower and pasture seed, although we are continually assessing other possible product offerings or means to increase revenue, including expanding into other, higher margin crops.

The mix of our product offerings will continue to change over time with the introduction of new seed varieties and hybrids resulting from our robust research and development efforts, including our potential expansion into gene-edited products in future periods.

Our revenue will fluctuate depending on the timing of orders from our customers and distributors. Because some of our large customers and distributors order in bulk only one or two times per year, our product revenue may fluctuate significantly from period to period. However, some of this fluctuation is offset by having operations in both the northern and southern hemispheres.

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Our stevia breeding program has yet to generate any meaningful revenue. However, management continues to evaluate this portion of our business and assess various means to monetize the results of our effort to breed new, better tasting stevia varieties. Such potential opportunities include possible licensing agreements and royalty-based agreements.

Licensing Revenue

During the year ended June 30, 2019, we entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of our alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the our existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties.

Cost of Revenue

Cost of revenue relates to sale of our seed products and consists of the cost of procuring seed, plant conditioning and packaging costs, direct labor and raw materials and overhead costs.

Operating Expenses

Research and Development Expenses

Research and development expenses consist of costs incurred in the discovery, development, breeding and testing of new products incorporating the traits we have specifically selected. These expenses consist primarily of employee salaries and benefits, consultant services, land leased for field trials, chemicals and supplies and other external expenses.

Overall, we have been focused on controlling research and development expenses, while balancing that objective against the recognition that continued advancement in product development is an important part of our strategic planning. We intend to focus our resources on high value activities. For alfalfa seed, we plan to invest in further development of differentiating forage quality traits.  For sorghum, we plan to invest in higher value grain products, proprietary herbicide tolerance traits and improved safety and palatability in forage products. We expect our research and development expenses will fluctuate from period to period as a result of the timing of various research and development projects.

Our internal research and development costs are expensed as incurred, while third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or construed for research and development activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses consist primarily of employee costs, including salaries, employee benefits and share-based compensation, as well as professional service fees, insurance, marketing, travel and entertainment expense, public company expense and other overhead costs. We proactively take steps on an ongoing basis to control selling, general and administrative expense as much as is reasonably possible.

Depreciation and Amortization

We amortize intangible assets, including those acquired from Pasture Genetics in 2020, Chromatin in 2018 and from SV Genetics in May 2016, using the straight-line method over the estimated useful life of the asset, consisting of periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 years for other intangible assets. Property, plant and equipment is depreciated using the straight-line method over

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the estimated useful life of the asset, consisting of periods of 5-35 years for buildings, 2-20 years for machinery and equipment and 2-5 years for vehicles.

Other (Income) Expense

Other expense consists primarily of foreign currency gains and losses, change in contingent consideration obligation, government grant income, changes in the estimated fair value of assets held for sale and interest expense in connection with amortization of debt discount. Interest expense primarily consists of interest costs related to outstanding borrowings on our working capital credit facilities and our financing with Conterra Agricultural Capital, LLC, or Conterra.

Provision (Benefit) for Income Taxes

Our effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to us in the various jurisdictions in which we operate. Under U.S. GAAP, if we determine that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. Tax regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated financial statements. As a result, our effective tax rate reflected in our consolidated financial statements is different from that reported in our tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on our tax return, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which we have already recorded the tax benefit in our consolidated statements of operations. In the fourth quarter of fiscal year 2017, we recorded a valuation allowance against all of our deferred tax assets. The full valuation allowance was recorded during the fiscal year 2017 as a result of changes to our operating results and future projections, resulting from a decline in export sales to Saudi Arabia. As a result, we don’t believe that it is more likely than not that our deferred tax assets will be realized.

Results of Operations

Fiscal Year Ended June 30, 2020 Compared to the Fiscal Year Ended June 30, 2019

Revenue and Cost of Revenue

Revenue for the year ended June 30, 2020 was $79.6 million compared to $109.7 million for the year ended June 30, 2019. The $30.1 million decrease in revenue for the year ended June 30, 2020 was primarily due to a $52.1 million decrease in product and license revenue received from Pioneer.  In May 2019, we terminated the production and distribution agreements with Pioneer, and entered into a new license agreement with Corteva.  

As part of the termination, Corteva agreed to purchase certain quantities of seed held by us as of the date of the termination, which Pioneer was not previously obligated to purchase.  Those quantities of seed will be delivered to Corteva periodically through February 2021.  Contemporaneously with the termination, we entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of our alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of our existing commercial conventional (non-GMO) alfalfa varieties and nine pre-commercial dormant alfalfa varieties.  We received a payment of $45.0 million in May 2019, $5.6 million in September 2019, $5.6 million in January 2020, $5.6 million in February 2020 and are entitled to receive an aggregate of $8.4 million in additional payments through February 2021. During the year ended June 30, 2020 we recorded product sales of $19.7 million to Pioneer, which was a decrease of $18.0 million from the year ended June 30, 2019 amount of $37.6 million.  Additionally, we recorded one-time license revenue of $34.2 million from Pioneer in the year ended June 30, 2019.

The $52.1 million decrease in product and license revenue to Pioneer was partially offset by an increase of $21.9 million in Core Revenue.  Core Revenue (excluding product and license revenue attributable to Pioneer) for the year ended June 30, 2020 was $59.9 million compared to Core Revenue for the year ended June 30, 2019 of $37.9

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million, representing an increase of 58%.  Included in Core Revenue for the year ended June 30, 2020 was $11.8 million of revenue pertaining to a partial period contribution from our acquisition of Pasture Genetics which occurred on February 24, 2020. Excluding contributions from Pasture Genetics, Core Revenue growth was 27%. Due to the revised agreements entered into with Pioneer in May 2019, we plan to provide Core Revenue as a metric to track performance of our business.

The increase in Core Revenue for the year ended June 30, 2020 can be attributed to an increase in alfalfa in Saudi Arabia and sorghum sales in the United States as well as growth in Pakistan, Europe and South Africa.

Sales into international markets represented 54% and 20% of our total revenue during the year ended June 30, 2020 and 2019, respectively. Domestic revenue accounted for 46% and 80% of our total revenue for the year ended June 30, 2020 and 2019, respectively. The decrease in domestic revenue as a percentage of total revenue was primarily attributable to the termination of the Pioneer and Corteva agreement mentioned above and our recent Pasture Genetics acquisition. We anticipate that international sales as a percentage of our total revenue will increase for fiscal 2021 as a result of the acquisition of Pasture Genetics and our expanded Australian market footprint.

The following table shows revenue from external sources by destination country:

	Years Ended June 30,
	2020				2019
United States	$	36,724,591	46	%	$	88,176,809	80	%
Australia		15,079,996	19	%		2,787,128	3	%
Saudi Arabia		9,189,291	12	%		4,745,993	4	%
Mexico		2,454,504	3	%		2,264,827	2	%
South Africa		2,182,553	3	%		797,722	1	%
Pakistan		2,124,038	3	%		1,009,120	1	%
Italy		1,400,641	2	%		326,364	0	%
Sudan		1,308,874	2	%		717,317	1	%
Libya		1,142,920	1	%		2,629,750	2	%
France		1,040,744	1	%		845,172	1	%
Other		6,934,046	8	%		5,422,309	5	%
Total	$	79,582,198	100	%	$	109,722,511	100	%

Cost of revenue of $64.6 million for the year ended June 30, 2020 was equal to 81.2% of total revenue for the year ended June 30, 2020, while the cost of revenue of $69.0 million for the year ended June 30, 2019 was equal to 62.9% of total revenue for the year ended June 30, 2019. Cost of revenue increased on a percentage basis primarily due to the license revenue generated during the year ended June 30, 2019, which did not recur during the year ended June 30, 2020.

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Total gross profit margin for the fiscal year ended June 30, 2020 was18.8% compared to 37.1% in the year ended June 30, 2019. The decrease in gross profit margin was primarily due to the decrease in license revenue.  Gross profit margin for the year ended June 30, 2020 included a $2.3 million inventory write-down.  Gross profit margin for the year ended June 30, 2019 included one-time license revenue of $34.2 million and an inventory write-down of $8.8 million.

Excluding the $2.3 million of inventory write-downs, gross margin would have been 21.7% for the year ended June 30, 2020. Excluding the $8.8 million of inventory write-downs and the $34.2 million of license revenue, gross margin would have been 20.3% for the year ended June 30, 2019. The increase in adjusted gross margin for the year ended June 30, 2020 is primarily driven by improved gross margins in alfalfa.  We believe its useful to exclude inventory write-downs and one-time license revenue in calculating adjusted gross margins in order to provide investors with a method to compare our operating results to prior periods and to peer companies.

Selling, General and Administrative Expenses

Selling, General and Administrative, or SG&A expense for the year ended June 30, 2020 totaled $21.3 million compared to $17.5 million for the year ended June 30, 2019. The $3.9 million increase in SG&A expense versus the prior year was primarily due to $3.2 million of additional investment in sales and marketing, $1.2 million from our newly acquired Pasture Genetics operations, $0.7 million for management personnel, $0.5 million for stock based compensation, $0.5 million for IT and cyber security consulting, partially offset by a decrease in bad debt expense of $1.3 million and other decreases. As a percentage of revenue, SG&A expenses were 26.8% for the year ended June 30, 2020, compared to 15.9% for the year ended June 30, 2019.

Research and Development Expenses

Research and development expenses for the year ended June 30, 2020 totaled $7.3 million compared to $6.3 million for the year ended June 30, 2019. The $1.0 million increase in research and development expense versus the prior year is driven by additional research and development activities incurred in connection with the Chromatin business following our October 2018 acquisition, as well as additional investment in our hybrid sorghum and sunflower programs and wheat program in Australia.  

Depreciation and Amortization

Depreciation and amortization expense for the year ended June 30, 2020 was $5.0 million compared to $4.1 million for the year ended June 30, 2019. Included in the amount was amortization expense for intangible assets, which totaled $2.1 million for the year ended June 30, 2020 and $2.1 million for the year ended June 30, 2019. The $0.9 million increase in depreciation and amortization expense over the prior year is primarily driven by $0.4 million of additional Chromatin expenses following the October 2018 acquisition, $0.2 million of expense associated with our February 2020 acquisition of Pasture Genetics, $0.3 million of expense associated with amortization of right of use assets and $0.2 million of additional expenses following the Dow Wheat Acquisition in August 2019, partially offset by fully depreciated assets.

Goodwill Impairment Charges

During the year ended June 30, 2020, we did not record an impairment charge. We recorded an impairment charge of $11.9 million during the year ended June 30, 2019. The impairment charge in fiscal 2019 related to the full impairment of our goodwill and was a result of the termination of the distribution agreement with Pioneer/Corteva.

The termination of the production and distribution agreements with Pioneer was, in our view, a potential indicator of impairment due to the significant reduction in future forecasted revenues. As a result, we initiated an impairment test and concluded that the entire goodwill balance was impaired.

Intangible Asset Impairment Charges

During the year ended June 30, 2020, we did not record an impairment charge. We recorded an impairment charge of $6.0 million during the year ended June 30, 2019. The impairment charge in fiscal 2019 was a result of the

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termination of the distribution agreement with Pioneer.The intangible asset write-off related to the carrying value of the distribution agreement, which previously was being amortized over the contractual life of the agreement.

Change in Estimated Value of Assets Held for Sale

The Company recorded $0.1 million and $1.5 of expenses for the years ended June 30, 2020 and June 30, 2019, respectively. The expense related to our estimated change in value of certain properties held for sale.

Change in contingent consideration obligation

The contingent consideration obligation is considered a level 3 fair value financial instrument and will be measured at each reporting period. The $0.3 million benefit to non-cash change in contingent consideration obligation for the year ended June 30, 2020 represents the decrease in the estimated fair value of the contingent consideration obligation associated with the February 2020 Pasture Genetics acquisition.

Interest Expense - Amortization of Debt Discount

Non-cash amortization of debt discount expense for the year ended June 30, 2020 was $0.6 million compared to $0.3 million for the year ended June 30, 2019. The expense in both years represents the amortization of the debt issuance costs associated with our working capital facilities, our secured property note and our equipment finance leases.

Interest Expense

Interest expense for the year ended June 30, 2020 totaled $2.0 million compared to $2.9 million for the year ended June 30, 2019. Interest expense for the year ended June 30, 2020 primarily consisted of interest incurred on the working capital credit facilities with CIBC, KeyBank and NAB, the secured property loan entered into in November 2017, and equipment finance leases. Interest expense for the year ended June 30, 2019 primarily consisted of interest incurred on the working capital credit facilities with KeyBank and NAB, the secured property loan entered into in November 2017, and equipment finance leases. The $0.9 million decrease in interest expense for the year ended June 30, 2020 was primarily driven by lower interest on the working capital credit facilities and decreased levels of borrowings.

Provision for Income Taxes

Our income tax expense totaled $0.4 million for the year ended June 30, 2020 compared to an income tax benefit of $0.1 million for the year ended June 30, 2019. Our effective tax rate was (2.0%) for the year ended June 30, 2020 compared to 1.6% for the year ended June 30, 2019. Our effective tax rate was relatively consistent year over year. The slight decrease in our effective tax rate for the year ended June 30, 2020 was primarily attributable to an increase in our non-US income tax expense for the year ended June 30, 2020 compared to the year ended June 30, 2019. Previously, we had certain intangible assets with indefinite lives for financial reporting purposes which produced deferred tax liabilities that could not be offset by a valuation allowance. During fiscal year 2019, we wrote down a majority of these assets for financial reporting purposes, generating a net deferred tax asset balance with respect to these indefinite-lived intangible assets, which is now fully offset by our valuation allowance. The increase to the valuation allowance in fiscal year 2019 generated a tax benefit and a positive effective tax rate, as opposed to the previous year when the increase in our net deferred tax liability balance produced an income tax provision and a negative effective tax rate. Due to the valuation allowance, we do not record the income tax expense or benefit related to substantially all of our current year operating results, as such results are generally incorporated in our net operating loss deferred tax asset position, which has a full valuation allowance against it. However, we did record tax expense related to certain other items occurring throughout the year.  For example, we recorded income tax expense related to the current and prior year tax return filings of certain of our subsidiaries located in Australia and South Africa and also recorded tax expense related to current year state tax return liabilities.

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Liquidity and Capital Resources

Our working capital and working capital requirements fluctuate from quarter to quarter depending on the phase of the growing and sales cycle that falls during a particular quarter. Our need for cash has historically been highest in the second and third fiscal quarters (October through March) because we historically have paid our North American contracted growers progressively, starting in the second fiscal quarter. In fiscal year 2020, we paid our North American growers approximately 50% of amounts due in the fall of 2019 and the balance was paid in the spring of 2020. This payment cycle to our growers was similar in fiscal year 2019, and we expect it to be similar for fiscal year 2021.  S&W Australia and Pasture Genetics, our Australian-based subsidiaries, have  production cycles that are counter-cyclical to North America; however, this also puts a greater demand on our working capital and working capital requirements during the second, third and fourth fiscal quarters based on timing of payments to growers in the second through fourth quarters.

Historically, due to the concentration of sales to certain distributors, our month-to-month and quarter-to-quarter sales and associated cash receipts are highly dependent upon the timing of deliveries to and payments from these distributors, which varies significantly from year to year.

We continuously monitor and evaluate our credit policies with all of our customers based on historical collection experience, current economic and market conditions and a review of the current status of the respective trade accounts receivable balance. Our principal working capital components include cash and cash equivalents, accounts receivable, inventory, prepaid expense and other current assets, accounts payable and our working capital lines of credit.

On February 24, 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics, the PG Acquisition, for an initial consideration that consisted of an upfront cash payment at closing of USD $7.5 million (AUD $11.4 million). A potential earn-out payment of up to USD $5.3 million (AUD $8.0 million), or the Earn-Out, is payable on September 30, 2022, or the Earn-Out Date. The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5, multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $11.4 million). At S&W Australia’s election, up to 50% of the Earn-Out may be paid in shares of our common stock at a per share purchase price equal to the volume-weighted average purchase price of our common stock during the 10-day period ending immediately prior to the Earn-Out Date.

In addition to funding our business with cash from operations, we have historically relied upon occasional sales of our debt and equity securities and credit facilities from financial institutions, both in the United States and South Australia.

Capital Resources and Requirements

Our future liquidity and capital requirements will be influenced by numerous factors, including:

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• the extent and duration of future operating income;

• the level and timing of future sales and expenditures;

• working capital required to support our growth;

• investment capital for plant and equipment;

• our sales and marketing programs;

• investment capital for potential acquisitions;

• our ability to renew and/or refinance our debt on acceptable terms;

• competition;

• market developments; and

• developments related to the COVID-19 pandemic.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. It is possible that further deterioration in credit and financial markets and confidence in economic conditions will occur. If equity and credit markets deteriorate, it may affect our ability to raise equity capital, borrow on our existing facilities or make any additional necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. In addition, while we are currently in compliance with our loan agreements, the COVID-19 pandemic may compromise our ability to comply with the terms of our loan agreements and could result in an event of default. If an event of default were to occur, our lenders could accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at all.

In recent periods, we have consummated the following equity and debt financings:

Debt Financings

Loan and Security Agreement with CIBC

On December 26, 2019, we entered into a Loan and Security Agreement with CIBC, or the Loan Agreement, which we amended on September 22, 2020.  As amended, the Loan Agreement provides for a $25.0 million credit facility, or the CIBC Credit Facility.  The key terms of the amended Loan Agreement include the following:

• Advances under the CIBC Credit Facility are to be used: (i) to refinance indebtedness to KeyBank, discussed below; (ii) to finance our ongoing working capital requirements; and (iii) for general corporate purposes. We may also use a portion of the CIBC Credit Facility to finance permitted acquisitions and related costs.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans may be based on (i) a Base Rate plus 1.0% per annum or (ii) LIBOR Rate plus 3.0% per annum (both as defined in the Loan Agreement), generally at our option. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of our assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate our outstanding obligations

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under the Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

As of June 30, 2020, we were not in compliance with a financial covenant requiring that we maintain a minimum a fixed charge coverage ratio equal to or greater than 1.10 to 1.00, tested as of June 30, 2020. Pursuant to the September 2020 amendment to the Loan Agreement, CIBC waived the fixed charge coverage ratio covenant as of June 30, 2020, and agreed to suspend its applicability prospectively until the quarter ending March 31, 2021. Beginning with the fiscal quarter ending March 31, 2021, we must maintain a fixed charge coverage equal to or greater than 1.15 to 1.00. Commencing with the quarter ending September 30, 2020, through and including December 31, 2020, the amendment provides that we must comply with a financial covenant requiring us to maintain year-to-date EBITDA (as calculated in the Loan Agreement) of no less than negative $6,000,000, tested quarterly. This covenant will not apply for periods after December 31, 2020.

We cannot guarantee that we will be able to comply with our covenants in the Loan Agreement in the future, or secure additional waivers if or when required. If we are unable to comply with or obtain a waiver of any noncompliance under the Loan Agreement, CIBC could declare an event of default or require us to further renegotiate the Loan Agreement on terms that may be significantly less favorable to us, or we may be required to seek additional or alternative financing. If we were to seek additional or alternative financing, any such financing may not be available to us on commercially reasonable terms or at all. Any declaration by CIBC of an event of default could significantly harm our liquidity, financial condition, operating results, business, and prospects and cause the price of our securities to decline.

Termination of KeyBank Credit Facility

In connection with the consummation of the Loan Agreement with CIBC described above, we terminated the Credit and Security Agreement, dated September 22, 2015, as subsequently amended, with KeyBank National Association, or KeyBank. In connection with such termination, we paid KeyBank approximately $5.9 million in aggregate principal, interest and fees that were outstanding and payable under this agreement at the time of its termination, and all liens on our assets and the assets of our subsidiaries guaranteeing such facility, together with such subsidiary guarantees, were released and terminated. This agreement had provided for borrowings of up to a $45.0 million revolving line of credit.

Conterra Transaction

In November 2017, we entered into a secured note financing transaction with Conterra for $12.5 million in gross proceeds. In the transaction, we issued two secured promissory notes to Conterra. The first promissory note, in the principal amount of $10.4 million, or the Secured Real Estate Note is secured by a first priority security interest in the property, plant and fixtures located at our Five Points, California and Nampa, Idaho production facilities and our Nampa, Idaho research facilities. The note was scheduled to mature on November 30, 2020, which was extended to November 30, 2022 pursuant to a December 24, 2019 amendment. The note bears interest of 7.75% per annum. We have agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The second promissory note in the principal amount of $2.1 million, was secured by a first security interest in certain equipment not attached to the real estate located at the facilities noted above.  In August 2018 we paid off in full this note pursuant to the sale-leaseback transaction discussed below.

We may prepay the note, in whole or in part, at any time.

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Equipment Sale-Leaseback

In August 2018, we closed on a sale-leaseback transaction with American AgCredit involving certain equipment located at our Five Points, California and Nampa, Idaho production facilities. Under the terms of the sale-leaseback transaction:

• We sold the equipment to American AgCredit for $2.1 million in proceeds. The proceeds were used to pay off in full the Conterra promissory note mentioned above.

• We entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an annual interest rate of 5.6%). At the end of the lease term, we will repurchase the equipment for $1.

Australian Facilities

S&W Australia and Pasture Genetics both have debt facilities with NAB, all of which are guaranteed by us up to a maximum of AUD $15,000,000 (USD $10,273,500 at June 30, 2020) and cross-guaranteed by S&W Australia and Pasture Genetics.      

S&W Australia.  S&W Australia has a series of debt facilities with NAB providing for up to AUD $25,337,000 (USD $17,353,000) of credit, the key terms of which were amended in February 2020 (in connection with the Pasture Genetics acquisition) and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an overdraft line having a credit limit of AUD $2,000,000 (USD $1,369,800 at June 30, 2020) and (ii) a borrowing base line having a credit limit of AUD $16,000,000 (USD $10,958,400 at June 30, 2020). The seasonal credit facility expires on March 31, 2022. As of June 30, 2020, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.7% per annum calculated daily. The Overdraft Facility permits S&W Australia to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of June 30, 2020, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of June 30, 2020, AUD $14,000,000 (USD $9,588,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of S&W Australia.  S&W Australia was in compliance with all debt covenants under the seasonal credit facility at June 30, 2020.

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• S&W Australia has a flexible rate loan, or the Term Loan,in the amount of AUD $5.0 million (USD $3,424,500 at June 30, 2020). Required annual principal payments of AUD $500,000 on the Term Loan will commence on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%. The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2023 and have interest rates ranging from 3.47% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,369,800) at June 30, 2020.  As of June 30, 2020, AUD $839,869 (USD $575,226) was outstanding under S&W Australia’s master asset finance facility.

• S&W Australia has a Keith Machinery and Equipment Facility for the machinery and equipment used in the operations of the Keith building. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. As of June 30, 2020, AUD $137,503 (USD $94,176) was outstanding under the Keith Machinery and Equipment Facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2020.

Pasture Genetics.  Pasture Genetics has a working capital facility with NAB and a facility with TOYOTA Finance to finance purchase of vehicles.

• Pasture Genetics has a working capital facility with NAB with a credit limit of AUD $10.0 million (USD $6,849,000 at June 30, 2020) and a borrowing base determined from qualified inventory and accounts receivable. The facility will expire on March 31, 2022. Interest will be payable on amounts outstanding under the facility at a floating trade refinance rate quoted by NAB plus 1.5% at the time of each drawdown.  The facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of Pasture Genetics.  As of June 30, 2020, AUD $10.0 million (USD $6,849,000) was outstanding under Pasture Genetics’ working capital facility with NAB.

• Pasture Genetics finances certain vehicle purchases with TOYOTA Finance.  This facility has various maturity dates through 2023 and have interest rates ranging from 4.04% to 5.83%.  As of June 30, 2020, AUD $750,839 (USD $514,249) was outstanding under TOYOTA Finance facility.

Pasture Genetics was in compliance with all debt covenants at June 30, 2020.

Paycheck Protection Program

On April 14, 2020, we received loan proceeds of $1,958,600, or the Loan, pursuant to the Paycheck Protection Program under the recently enacted Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, administered by the U.S. Small Business Administration, or the SBA. If the loan proceeds are fully utilized to pay qualified expenses, the full principal amount of the Paycheck Protection Program, or PPP, loan, along with any accrued interest, may qualify for loan forgiveness, subject to potential reduction based on the level of full-time employees maintained by the organization.

When we applied for the loan, we believed we would qualify to have the loan forgiven under the terms of PPP, and therefore considered the loan to be substantively a conditional government grant.  We have performed initial calculations for PPP loan forgiveness, and expect that the PPP loan will be forgiven in full because 1) we have, prior

43

to June 30, 2020, utilized all of the proceeds for payroll and other qualified expenses and 2) we believe we will continue to comply with other terms and conditions necessary for forgiveness.

We plan to submit the PPP loan forgiveness application in the near term.  Although we believe it is probable that the PPP loan will be forgiven, our actions and information must be evaluated by the lender and SBA before forgiveness is formally granted.  

Equity Issuances

In September 2018, we sold 1,607,717 shares of our common stock to MFP at a purchase price of $3.11 per share, for gross proceeds of approximately $5.0 million.  

In October 2018, we issued to MFP 7,235 shares of a newly designated Series A Convertible Preferred Stock at a purchase price of $3,110 per share, for aggregate gross proceeds of approximately $22.5 million. The preferred shares carried no voting rights and were automatically convertible into shares of our common stock at the rate of 1,000 shares of common stock per preferred share upon the approval of our stockholders for the issuance of the requisite shares of common stock. Pursuant to the purchase agreement for the preferred shares, we agreed to use reasonable best efforts to solicit the approval of our shareholders for the issuance of stock upon the conversion of the preferred shares.  Approval was obtained in November 2018 and the shares of Series A Convertible Preferred Stock converted into 7,235,000 shares of our common stock.

Summary of Cash Flows

The following table shows a summary of our cash flows for the years ended June 30, 2020 and 2019:

	Years Ended June 30,
	2020			2019
Cash flows from operating activities	$	(5,763,627	)	$	21,295,831
Cash flows from investing activities		(10,286,370	)		(26,566,353	)
Cash flows from financing activities		17,049,699			4,630,925
Effect of exchange rate changes on cash		(308,410	)		(250,073	)
Net increase (decrease) in cash and cash    equivalents		691,292			(889,092	)
Cash and cash equivalents, beginning of period		3,431,802			4,320,894
Cash and cash equivalents, end of period	$	4,123,094		$	3,431,802

OperatingActivities

For the year ended June 30, 2020, operating activities used $5.8 million in cash.  Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $11.0 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows provided $5.2 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by a decrease in inventory of $11.1 million, partially offset by a decrease in accounts payable of $2.9 million, a decrease in deferred revenue of $2.9 million, and an increase in accounts receivable of $1.8 million.

For the year ended June 30, 2019, operating activities provided $21.3 million in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows provided $24.5 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows used $3.2 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by an increase in inventory of $13.3 million, offset by increases in deferred revenue of $8.1 million related to the Corteva license agreement and accrued expenses and other current liabilities of $3.1 million.

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Investing Activities

Investing activities during the year ended June 30, 2020 used $10.3 million in cash. The Dow Wheat Acquisition accounted for $2.6 million of the cash used in investing activities and the Pasture Genetics Acquisition accounted for $7.5 million.  We also had additions to property, plant and equipment of $2.0 million consisting primarily of equipment purchases for our distribution facility in Keith, Australia, research and development facilities in Tamworth, Australia and leasehold improvements to our new corporate headquarters in Longmont, Colorado; partially offset by $1.8 million of net proceeds from the sale of properties in Arlington Wisconsin and Plainview Texas.

Investing activities during the year ended June 30, 2019 used $26.6 million in cash. The Chromatin Acquisition accounted for $26.4 million of the cash used in investing activities. We also had additions to property, plant and equipment of $0.7 million consisting primarily of equipment purchases for our facility in Keith, Australia and replacements of our vehicle fleet in the US.

Financing Activities

Financing activities during the year ended June 30, 2020 provided $17.0 million in cash. During the year ended June 30, 2020, we had net borrowings on the working capital lines of credit of $16.8 million, borrowings of long-term debt of $3.9 million and repayments of long-term debt of $2.6 million and debt issuance costs of $0.9 million.

Financing activities during the year ended June 30, 2019 provided $4.6 million in cash. During the year ended June 30, 2019, we completed a private placement of common stock which raised net proceeds of $4.9 million in cash and a private placement of preferred stock which raised net proceeds of $22.4 million. During the year ended June 30, 2019, we also had net repayments on the working capital lines of credit of $21.3 million. On August 15, 2018, we closed on a sale and leaseback transaction involving certain equipment located at our Five Points, California and Nampa, Idaho production facilities. Under the terms of the transaction, we sold the equipment for $2.1 million in proceeds.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations, including our revenue and income from continuing operations. However, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the year ended June 30, 2020.

Capital Resources and Requirements

Our future liquidity and capital requirements will be influenced by numerous factors, including:

• the extent and duration of future operating income;

• the level and timing of future sales and expenditures;

• working capital required to support our growth;

• investment capital for plant and equipment;

• our sales and marketing programs;

• investment capital for potential acquisitions;

• our ability to renew and/or refinance our debt on acceptable terms;

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• competition; and

• market developments.

Critical Accounting Policies

The accounting policies and the use of accounting estimates are set forth in the footnotes to our consolidated financial statements.

In preparing our financial statements, we must select and apply various accounting policies. Our most significant policies are described in Note 2 – Summary of Significant Accounting Policies of the footnotes to the consolidated financial statements. In order to apply our accounting policies, we often need to make estimates based on judgments about future events. In making such estimates, we rely on historical experience, market and other conditions, and on assumptions that we believe to be reasonable. However, the estimation process is by its nature uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our results of operations, financial condition and changes in financial condition may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or to take other corrective actions, either of which may also have a material effect on our results of operations, financial condition or changes in financial condition. Members of our senior management have discussed the development and selection of our critical accounting estimates, and our disclosure regarding them, with the audit committee of our board of directors, and do so on a regular basis.

We believe that the following estimates have a higher degree of inherent uncertainty and require our most significant judgments. In addition, had we used estimates different from any of these, our results of operations, financial condition or changes in financial condition for the current period could have been materially different from those presented.

Goodwill

Goodwill is assessed annually for impairment or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit.  We adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, or ASU 2017-04, effective July 1, 2018. This standard eliminates Step 2 from the goodwill impairment test. Instead, we perform our annual or interim goodwill impairment test by comparing the fair value of its one reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

The goodwill balance at June 30, 2020 relates to our February 2020 acquisition of Pasture Genetics. Upon completing the impairment test on its one reporting unit, there was no impairment for the year ended June 30, 2020.

During the fourth quarter of the year ended June 30, 2019, we terminated our production and distribution agreements with Pioneer, thereby triggering a potential indicator of goodwill impairment. As a result, we initiated a goodwill impairment test for the year ended June 30, 2019.

We compared the carrying value of our invested capital to estimated fair values at June 30, 2019. We estimated the fair value based on the income approach. The discounted cash flows served as the primary basis for the income approach and were based on discrete financial forecasts developed by management. Cash flows beyond the discrete forecast period of ten years were estimated using the perpetuity growth method calculation. The income approach valuation included estimated weighted average cost of capital, which was 10.6%.

Upon completing the impairment test, we determined that the fair value of invested capital was less than the carrying value by approximately 10%, thus indicating an impairment. We recognized a goodwill impairment charge of $11.9 million for the year ended June 30, 2019, which represented the entire goodwill balance prior to the impairment charge.

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Intangible Assets

All amortizable intangible assets are assessed for impairment whenever events indicate a possible loss. Such an assessment involves estimating undiscounted cash flows over the remaining useful life of the intangible. If the review indicates that undiscounted cash flows are less than the recorded value of the intangible asset, the carrying amount of the intangible is compared to its fair value, with an impairment loss recognized if the fair value is below carrying value. Fair values are typically estimated using discounted cash flow techniques. Significant changes in key assumptions about the business, market conditions and prospects for which the intangible asset is currently utilized or expected to be utilized could result in an impairment charge.

In conjunction with the termination of the Pioneer production and distribution agreements, we recorded a $6.0 million impairment charge of intangible assets related to the Pioneer distribution agreements for the year ended June 30, 2019.

Stock-Based Compensation

We account for stock-based compensation in accordance with FASB Accounting Standards Codification Topic 718 Stock Compensation, which establishes accounting for equity instruments exchanged for employee services. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee’s requisite service period (generally the vesting period of the equity grant).

We account for equity instruments, including stock options issued to non-employees, in accordance with authoritative guidance for equity-based payments to non-employees (FASB ASC 505-50). Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest.

We utilize the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under share-based compensation plans. The Black-Scholes-Merton model requires us to estimate a variety of factors including, but not limited to, the expected term of the award, stock price volatility, dividend rate, risk-free interest rate. The input factors to use in the valuation model are based on subjective future expectations combined with management judgment. The expected term used represents the weighted-average period that the stock options are expected to be outstanding. We have used the historical volatility for our stock for the expected volatility assumption required in the model, as it is more representative of future stock price trends. We use a risk-free interest rate that is based on the implied yield available on U.S. Treasury issued with an equivalent remaining term at the time of grant. We have not paid dividends in the past and currently do not plan to pay any dividends in the foreseeable future, and as such, dividend yield is assumed to be zero for the purposes of valuing the stock options granted. We evaluate the assumptions used to value stock awards on a quarterly basis. If factors change, and we employ different assumptions, share-based compensation expense may differ significantly from what we have recorded in the past. When there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense. To the extent that we grant additional equity securities to employees, our share-based compensation expense will be increased by the additional unearned compensation resulting from those additional grants.

Income Taxes

We regularly assess the likelihood that deferred tax assets will be recovered from future taxable income. To the extent management believes that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established. When a valuation allowance is established or increased, an income tax charge is included in the consolidated financial statements and net deferred tax assets are adjusted accordingly. Changes in tax laws, statutory tax rates and estimates of our future taxable income levels could result in actual realization of the deferred tax assets being materially different from the amounts provided for in the consolidated financial statements. If the actual recovery amount of the deferred tax asset is less than anticipated, we would be required to write-off the

47

remaining deferred tax asset and increase the tax provision, resulting in a reduction of earnings and stockholders’ equity.

Inventories

All inventories are accounted for on a lower of cost or net realizable value. Inventories consist of raw materials and finished goods. Depending on market conditions, the actual amount received on sale could differ from our estimated value of inventory. In order to determine the value of inventory at the balance sheet date, we evaluate a number of factors to determine the adequacy of provisions for inventory. The factors include the age of inventory, the amount of inventory held by type, future demand for products and the expected future selling price we expect to realize by selling the inventory. Our estimates are judgmental in nature and are made at a point in time, using available information, expected business plans and expected market conditions. We perform a review of our inventory by product line on a quarterly basis.

Our subsidiary, S&W Australia, does not fix the final price for seed payable to its growers until the completion of a given year’s sales cycle pursuant to its standard contract production agreement. We record an estimated unit price accordingly, inventory, cost of revenue and gross profits are based upon management’s best estimate of the final purchase price to our S&W Australia growers. To the extent the estimated purchase price varies from the final purchase price for seed, the adjustment to actual could materially impact the results in the period when the difference between estimates and actuals are identified. If the actual purchase price is in excess of our estimated purchase price, this would negatively impact our financial results including a reduction in gross profits and earnings.

During the fourth quarter of the year ended June 30, 2019, we recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations. $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered our planned consumption of these varieties and as a result we determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices. The remaining inventory write-down primarily relates to changes in our assessment of the future market prices for non-dormant alfalfa seed varieties.  The changes in our assessment occurred as we updated our business plans taking into account activity during the fourth quarter, which is the height of the sales season for non-dormant varieties.  

During the year ended June 30, 2020, we recognized a write-down of inventory in the amount of $2.3 million which is included in Cost of Revenue in the Consolidated Statement of Operations. The write-down of inventory during the year ended June 30, 2020 was primarily related to certain inventory lots that deteriorated in quality and germination rates during the year.

Allowance for Doubtful Accounts

We regularly assess the collectability of receivables and provide an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable.Our estimates are judgmental in nature and are made at a point in time. Management believes the allowance for doubtful accounts is appropriate to cover anticipated losses in our accounts receivable under current conditions; however, unexpected, significant deterioration in any of the factors mentioned above or in general economic conditions could materially change these expectations.

Item 7A. Qualitative and Quantitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide information typically disclosed under this item.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	50
Consolidated Balance Sheets at June 30, 2020 and 2019	51
Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2020 and 2019	52
Consolidated Statements of Comprehensive Loss for the Fiscal Years Ended June 30, 2020 and 2019	53
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended June 30, 2020 and 2019	54
Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2020 and 2019	55
Notes to Consolidated Financial Statements	56

49

Report of Independent Registered Public Accounting Firm

Stockholders and the Board of Directors of S&W Seed Company

Longmont, Colorado

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of S&W Seed Company, (the “Company”) as of June 30, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2020, and the related notes, (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2020 and 2019, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2020, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for lease contracts in fiscal year 2020 due to the adoption of ASC 842, Leases.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States), (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Crowe LLP

We have served as the Company's auditor since 2015.

Sacramento, California

September 23, 2020

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S&W SEED COMPANY

CONSOLIDATED BALANCE SHEETS

ASSETS	June 30, 2020			June 30, 2019
CURRENT ASSETS
Cash and cash equivalents	$	4,123,094		$	3,431,802
Accounts receivable, net		19,023,098			13,380,464
Inventories, net		63,882,938			71,295,520
Prepaid expenses and other current assets		1,374,677			1,687,490
Assets held for sale		—			1,850,000
TOTAL CURRENT ASSETS		88,403,807			91,645,276
Property, plant and equipment, net		20,494,312			20,634,949
Intangibles, net		38,784,058			32,714,484
Goodwill		1,508,675			—
Other assets		6,764,781			1,369,560
TOTAL ASSETS	$	155,955,633		$	146,364,269
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	8,045,694		$	6,930,829
Deferred revenue		6,171,904			9,054,549
Accrued expenses and other current liabilities		9,618,892			6,073,110
Lines of credit, net		26,983,264			10,755,548
Current portion of long-term debt, net		1,780,522			1,113,502
TOTAL CURRENT LIABILITIES		52,600,276			33,927,538
Long-term debt, net, less current portion		14,328,823			12,158,095
Contingent consideration obligation		4,263,503			—
Other non-current liabilities		3,427,054			280,424
TOTAL LIABILITIES		74,619,656			46,366,057
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized;    no shares issued and outstanding		—			—
Common stock, $0.001 par value; 50,000,000 shares authorized;    33,457,861 issued and 33,432,861 outstanding at June 30, 2020;    33,303,218 issued and 33,278,218 outstanding at June 30, 2019;		33,458			33,303
Treasury stock, at cost, 25,000 shares		(134,196	)		(134,196	)
Additional paid-in capital		137,809,540			136,751,875
Accumulated deficit		(50,140,942	)		(30,466,618	)
Accumulated other comprehensive loss		(6,111,424	)		(6,138,467	)
Noncontrolling interests		(120,459	)		(47,685	)
TOTAL STOCKHOLDERS' EQUITY		81,335,977			99,998,212
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	155,955,633		$	146,364,269

See notes to consolidated financial statements.

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S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended June 30,
	2020			2019
Revenue
Product and other	$	79,582,198		$	75,507,078
Licensing		—			34,215,433
Total revenue		79,582,198			109,722,511
Cost of revenue
Product and other		64,647,936			69,014,490
Total cost of revenue		64,647,936			69,014,490
Gross profit		14,934,262			40,708,021
Operating expenses
Selling, general and administrative expenses		21,348,092			17,486,071
Research and development expenses		7,336,754			6,272,758
Depreciation and amortization		5,036,464			4,128,546
Gain on disposal of property, plant and equipment		(23,299	)		(86,222	)
Goodwill impairment charges		—			11,865,811
Intangible asset impairment charges		—			6,034,792
Total operating expenses		33,698,011			45,701,756
Loss from operations		(18,763,749	)		(4,993,735	)
Other (income) expense
Foreign currency loss (gain)		98,620			(99,467	)
Reduction of anticipated loss on sub-lease land		—			(141,373	)
Change in estimated value of assets held for sale		92,931			1,521,855
Change in contingent consideration obligation		(302,139	)		—
Government grant income		(1,958,600	)		—
Loss on extinguishment of debt		140,638			—
Interest expense - amortization of debt discount		555,049			340,847
Interest expense		1,970,882			2,886,077
Loss before income taxes		(19,361,130	)		(9,501,674	)
Provision for income taxes		385,968			(148,747	)
Net loss	$	(19,747,098	)	$	(9,352,927	)
Net loss attributed to noncontrolling interests		(72,774	)		(47,685	)
Net loss attributable to S&W Seed Company	$	(19,674,324	)	$	(9,305,242	)
Net loss attributable to S&W Seed Company per common share:
Basic	$	(0.59	)	$	(0.31	)
Diluted	$	(0.59	)	$	(0.31	)
Weighted average number of common shares outstanding:
Basic		33,348,263			30,102,158
Diluted		33,348,263			30,102,158

See notes to consolidated financial statements.

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S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Years Ended June 30,
	2020			2019
Net loss	$	(19,747,098	)	$	(9,352,927	)
Foreign currency translation adjustment, net of income taxes		27,043			(347,805	)
Comprehensive loss	$	(19,720,055	)	$	(9,700,732	)
Comprehensive loss attributable to noncontrolling interests		(72,774	)		(47,685	)
Comprehensive loss attributable to S&W Seed Company	$	(19,647,281	)	$	(9,653,047	)

See notes to consolidated financial statements.

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S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Preferred Stock						Common Stock				Treasury Stock						Additional Paid-In			Accumulated			Noncontrolling			Accumulated Other Comprehensive			Total Stockholders'
	Shares			Amount			Shares		Amount		Shares			Amount			Capital			Deficit			Interests			Loss			Equity
Balance, June 30, 2018		—			—			24,367,906	$	24,367	(25,000)			$	(134,196	)	$	108,803,991		$	(21,161,376	)		—		$	(5,790,662	)	$	81,742,124
Stock-based compensation - options, restricted stock, and RSUs		—			—			—		—		—			—			694,610			—			—			—			694,610
Net issuance to settle RSUs		—			—			92,595		93		—			—			(39,407	)		—			—			—			(39,314	)
Proceeds from sale of preferred stock, net of fees and expenses		7,235			7			—		—		—			—			22,373,835			—			—			—			22,373,842
Conversion of preferred stock to common stock		(7,235	)		(7	)		7,235,000		7,235		—			—			(7,228	)		—			—			—			—
Proceeds from sale of common stock, net of fees and expenses		—			—			1,607,717		1,608		—			—			4,926,074			—			—			—			4,927,682
Other comprehensive loss		—			—			—		—		—			—			—			—			—			(347,805	)		(347,805	)
Net loss		—			—			—		—		—			—			—			(9,305,242	)		(47,685	)		—			(9,352,927	)
Balance, June 30, 2019		—		$	—			33,303,218	$	33,303		(25,000	)	$	(134,196	)	$	136,751,875		$	(30,466,618	)	$	(47,685	)	$	(6,138,467	)	$	99,998,212
Stock-based compensation - options, restricted stock, and RSUs		—			—			—		—		—			—			1,167,951			—			—			—			1,167,951
Net issuance to settle RSUs		—			—			154,643		155		—			—			(110,286	)		—			—			—			(110,131	)
Other comprehensive income		—			—			—		—		—			—			—			—			—			27,043			27,043
Net loss		—			—			—		—		—			—			—			(19,674,324	)		(72,774	)		—			(19,747,098	)
Balance, June 30, 2020		—		$	—			33,457,861	$	33,458		(25,000	)	$	(134,196	)	$	137,809,540		$	(50,140,942	)	$	(120,459	)	$	(6,111,424	)	$	81,335,977

See notes to consolidated financial statements.

54

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended June 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(19,747,098	)	$	(9,352,927	)
Adjustments to reconcile net loss from operating activities to net
cash (used in) provided by operating activities
Stock-based compensation		1,167,951			694,610
Change in allowance for doubtful accounts		(255,000	)		996,461
Inventory write-down		2,344,800			8,822,103
Depreciation and amortization		5,036,464			4,128,546
Gain on disposal of property, plant and equipment		(23,299	)		(86,222	)
Goodwill impairment charges		—			11,865,811
Intangible asset impairment charges		—			6,034,792
Change in deferred tax provision		—			(270,083	)
Change in foreign exchange contracts		(7,615	)		(52,778	)
Change in contingent consideration obligation		(302,139	)		—
Change in estimated value of assets held for sale		92,931			1,521,855
Amortization of debt discount		555,049			340,847
Loss on debt extinguishment		140,638			—
Reduction of anticipated loss on sub-lease land		—			(141,373	)
Changes in:
Accounts receivable		(1,819,625	)		307,209
Inventories		11,083,296			(13,331,376	)
Prepaid expenses and other current assets		412,526			(413,751	)
Other non-current asset		(96,398	)		203,132
Accounts payable		(2,879,541	)		(830,718	)
Deferred revenue		(2,882,359	)		8,069,734
Accrued expenses and other current liabilities		2,125,503			3,114,523
Other non-current liabilities		(709,711	)		(324,564	)
Net cash (used in) provided by operating activities		(5,763,627	)		21,295,831
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(1,972,231	)		(735,316	)
Proceeds from disposal of property, plant and equipment		34,410			567,492
Proceeds from sale of assets held for sale		1,757,069			—
Additions to internal use software		—			(43,000	)
Acquisition of business, net of cash acquired		(7,472,618	)		(26,354,951	)
Acquisition of wheat assets		(2,633,000	)		—
Net cash used in investing activities		(10,286,370	)		(26,565,775	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		—			4,927,682
Net proceeds from sale of preferred stock		—			22,373,842
Taxes paid related to net share settlements of stock-based compensation awards		(110,132	)		(39,314	)
Borrowings and repayments on lines of credit, net		16,819,564			(21,289,159	)
Borrowings of long-term debt		3,865,780			2,359,431
Debt issuance costs		(907,392	)		(411,315	)
Repayments of long-term debt		(2,618,121	)		(3,290,242	)
Net cash provided by financing activities		17,049,699			4,630,925
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(308,410	)		(250,073	)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		691,292			(889,092	)
CASH AND CASH EQUIVALENTS, beginning of the period	$	3,431,802		$	4,320,894
CASH AND CASH EQUIVALENTS, end of period	$	4,123,094		$	3,431,802
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid (received) during the period for:
Interest	$	1,984,703		$	2,945,034
Income taxes		272,027			69,713

See notes to consolidated financial statements.

55

S&W SEED COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

The Company began as S&W Seed Company, a general partnership, in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. We then incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company’s initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership’s original business. Seed Holding, LLC remains a consolidated subsidiary of the Company.

In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation.

On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd, or S&W Holdings, consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation, or SGI, from SGI’s shareholders. In April 2018, SGI changed its name to S&W Seed Company Australia Pty Ltd, or S&W Australia.

On September 19, 2018, the Company and AGT Foods Africa Proprietary Limited, or AGT, formed a venture based in South Africa named SeedVision Proprietary Limited, or SeedVision. SeedVision will leverage AGT's African-based production and processing facilities to produce S&W's hybrid sunflower, grain sorghum, and forage sorghum to be sold by SeedVision in the African continent, Middle East countries, and Europe.

On February 24, 2020, S&W Australia, acquired all of the issued and outstanding shares of Pasture Genetics, from Pasture Genetics’ sole shareholder.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds, primarily alfalfa seed. The Company owns seed cleaning and processing facilities, which are located in Five Points, California, Nampa, Idaho, Dumas, Texas, New Deal, Texas and Keith, South Australia. The Company’s seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products.

The Company has also been actively engaged in expansion initiatives through a combination of organic growth and strategic acquisitions, including in December 31, 2014, when the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets and assumed certain related liabilities, or the Pioneer Acquisition, of Pioneer Hi-Bred International, Inc., or Pioneer.

The Company had a long-term distribution agreement with Pioneer regarding conventional (non-GMO) varieties, and a production agreement with Pioneer (relating to GMO-traited varieties). These agreements were terminated on May 20, 2019. See Note 4 for further discussion.

In May 2016, the Company acquired the assets and business of SV Genetics, a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represented the Company’s initial effort to diversify its product portfolio beyond alfalfa seed and stevia.

In October 2018, the Company acquired substantially all of the assets of Chromatin, Inc., a U.S.-based sorghum genetics and seed company, as part of the Company's efforts to expand its penetration into the hybrid sorghum market.

In August 2019, S&W Australia, a wholly owned subsidiary of S&W Seed Company, licensed certain wheat germplasm varieties and acquired certain equipment from affiliates of Corteva.  In the transaction, S&W Australia

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paid a one-time license fee of $2.3 million and an equipment purchase price of $0.3 million.  The license has an initial term of 15 years.

In February 2020, S&W Australia acquired Pasture Genetics, the third largest pasture seed company in Australia, as part of the Company’s efforts to diversify its product offerings and expand its distribution channels.

The Company’s operations span the world’s alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, Texas, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 40 countries around the globe.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. We have recorded a combined $1.3 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2020. We have recorded a combined $0.6 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2019.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows. The new strain of coronavirus (“COVID-19”) in FY2020 and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic

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has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared. However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 26% of its revenue for the year ended June 30, 2020. One customer accounted for 65% of its revenue for the year ended June 30, 2019.

One customer accounted for 21% of the Company’s accounts receivable at June 30, 2020. One customer accounted for 19% of the Company’s accounts receivable at June 30, 2019.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 54% and 20% of revenue during the years ended June 30, 2020 and 2019, respectively. The net book value of fixed assets located outside the United States was 17% and 11% of total fixed assets at June 30, 2020 and June 30, 2019, respectively. Cash balances located outside of the United States may not be insured and totaled $1,690,748 and $236,822 at June 30, 2020 and June 30, 2019, respectively.

The following table shows revenue from external sources by destination country:

	Years Ended June 30,
	2020				2019
United States	$	36,724,591	46	%	$	88,176,809	80	%
Australia		15,079,996	19	%		2,787,128	3	%
Saudi Arabia		9,189,291	12	%		4,745,993	4	%
Mexico		2,454,504	3	%		2,264,827	2	%
South Africa		2,182,553	3	%		797,722	1	%
Pakistan		2,124,038	3	%		1,009,120	1	%
Italy		1,400,641	2	%		326,364	0	%
Sudan		1,308,874	2	%		717,317	1	%
Libya		1,142,920	1	%		2,629,750	2	%
France		1,040,744	1	%		845,172	1	%
Other		6,934,046	8	%		5,422,309	5	%
Total	$	79,582,198	100	%	$	109,722,511	100	%

Covid-19 Pandemic

In addition to the foregoing, the Company is monitoring closely the impact of the COVID-19 pandemic on its business, including its results of operations and financial condition, and has implement measures designed to protect the health and safety of its employees while continuing its operations.  

In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. The Company’s sales efforts also have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically the Company’s most active selling period, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, the Company immediately attempted to shift its sales activities to video conferencing and similar customer interaction models, but the Company has found these alternative approaches to generally be less effective than in-person sales efforts.

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In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, this would adversely affect the Company’s product revenue.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

The terms of the Company’s loan and security agreement with CIBC place restrictions on its operating and financial flexibility (See Notes 9 and 19). The COVID-19 pandemic creates risk in the Company’s ability to comply with its CIBC covenants which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. In order for the Company to maintain compliance with its CIBC covenants, the Company may need to obtain additional capital or alternative financing. There can be no assurance that the Company will be successful in raising additional capital or obtaining alternative financing. If the Company is unable to raise sufficient additional capital or obtain alternative financing, it may need to reduce the scope of its operations or sell certain assets.

International Operations

The Company translates its foreign operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $1,366,220 and $1,576,900 at June 30, 2020 and June 30, 2019, respectively.

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Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

The Company’s subsidiary, S&W Australia, does not fix the final price for seed payable to its growers until the completion of a given year’s sales cycle pursuant to its standard contract production agreement. S&W Australia records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management’s best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

During the fourth quarter of the year ended June 30, 2019, the Company recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations.  $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered the Company’s planned consumption of these varieties and as a result the Company determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices.  The remaining inventory write-down primarily relates to changes in the Company’s assessment of the future market prices for non-dormant alfalfa seed varieties.  The changes in the Company’s assessment occurred as it updated its business plans taking into account activity during the fourth quarter of fiscal year 2019, which is the height of the sales season for non-dormant varieties.

Components of inventory are:

	June 30, 2020		June 30, 2019
Raw materials and supplies	$	1,227,185	$	664,541
Work in progress		4,395,503		5,664,934
Finished goods		58,260,250		64,966,045
	$	63,882,938	$	71,295,520

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 years for vehicles. 

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names

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and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 20years for customer relationships, 15 yearsfor trade names and 16years for other intangible assets.

Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2020 on its one reporting unit and determined that goodwill was not impaired. See Note 7 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2019 and recorded an impairment charge of $11.9 million.  During the year ended June 30, 2020, the Company did not record an impairment charge.  The impairment charge in fiscal year 2019 related to the full impairment of the Company’s goodwill and was a result of the termination of the distribution agreement with Pioneer/Corteva.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $1.3 million at June 30, 2020 and 2019, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted ASU 2016-01,Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.  

Prior to July 1, 2018, the investment was accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges would have been recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

No adjustments for impairment or observable transactions were made in fiscal years 2020 or 2019.  

Research and Development Costs

The Company is engaged in ongoing research and development, or R&D, of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

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Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s effective tax rate for the years ended June 30, 2020 and 2019 has been affected by the valuation allowance on the Company’s deferred tax assets.

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, or EPS, is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

The treasury stock method is used for common stock warrants, stock options, and restricted stock awards. Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with net number of shares assumed to be issued added to the denominator.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2020			2019
Numerator:
Net loss attributable to S&W Seed Company	$	(19,674,324	)	$	(9,305,242	)
Numerator for basis EPS		(19,674,324	)		(9,305,242	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(19,674,324	)	$	(9,305,242	)
Denominator:
Denominator for basic EPS-weighted- average    shares		33,348,263			30,102,158
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Warrants		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		33,348,263			30,102,158
Basic EPS	$	(0.59	)	$	(0.31	)
Diluted EPS	$	(0.59	)	$	(0.31	)

The effects of employee stock options and stock units, and warrants are excluded because they would be anti-dilutive due to the Company’s net loss.  

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Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Refer to Note 4 and Note 7 for impairment discussion.

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;

• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The assets acquired and liabilities assumed in the Chromatin acquisition were valued at fair value on a non-recurring basis as of October 25, 2018.

The assets acquired and liabilities assumed in the Dow Wheat acquisition (see Note 7) were valued at fair value on a non-recurring basis as of August 15, 2019.

The assets acquired and liabilities assumed in the Pasture Genetics acquisitions (see Note 6) were valued at fair value on a non-recurring basis as of February 24, 2020.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates.

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Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	35,218	$	—
Contingent consideration obligations	$	—	$	—	$	4,263,503
Total	$	—	$	35,218	$	4,263,503

	Fair Value Measurements as of June 30, 2019 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	42,255	$	—
Total	$	—	$	42,255	$	—

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, or ASU 2017-04, effective July 1, 2018. This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance was applied during the goodwill impairment test in the fourth quarter of 2019.  See Note 7.

The Company adopted Accounting Standards Update No. 2016-02: Leases, or ASU 2016-02, effective July 1, 2019.  ASC 842 superseded previously existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position.

The adoption of ASC 842 resulted in the recognition of $2.6 million of right-of-use assets, or ROU assets, and $4.3 million related lease liabilities as of July 1, 2019, with no cumulative effect adjustment. The adoption of ASC 842 had no impact on the Company’s consolidated statement of operations and consolidated statement of cash flows.

The Company adopted ASC 842 on a modified retrospective approach at the effective date and, therefore, did not revise comparative period information or disclosure.  In addition, the Company elected the package of practical expedients permitted under ASC 842.

See “Note 3—Leases” for additional information on the adoption of ASC 842.

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Recently Issued, but Not Yet Adopted, Accounting Pronouncements

In August 2018, the FASB issued authoritative guidance intended to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.  This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.  The guidance also requires presentation of the capitalized implementation costs in the statement of financial position and in the statement of cash flows in the same line items that a prepayment for the fees of the association hosting arrangement would be presented, and the expense related to the capitalized implementation costs to be presented in the same line item in the statement of operations as the fees associated with the hosting element (service) of the arrangement.  This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted.  The Company’s adoption of ASU 2018-15 on July 1, 2020 is not expected to impact its consolidated financial statements and related disclosures.

NOTE 3 - LEASES

S&W leases office and laboratory space, field research plots and equipment used in connection with its operations under various operating and finance leases.

ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the net present value of the Company’s obligation to make payments arising from these leases. The lease liabilities are based on the present value of fixed lease payments over the lease term using the implicit lease interest rate or, when unknown, the Company's incremental borrowing rate on the lease commencement date or July 1, 2019 for leases that commenced prior to that date. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less ("short-term leases") are not recorded on the accompanying consolidated balance sheet.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component under the practical expedient provisions of the standard. The Company has lease agreements with terms less than one year. For the qualifying short-term leases, the Company elected the short-term lease recognition exemption in which the Company will not recognize ROU assets or lease liabilities, including the ROU assets or lease liabilities for existing short-term leases of those assets in upon adoption.

Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities.  Variable lease payments and short-term lease expenses were immaterial to the Company’s financial statements for the year ended June 30, 2020. The Company’s lease agreements do not contain material restrictive covenants.

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The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification	June 30, 2020
Assets:
Right of use assets - operating leases	Other assets	$	4,137,255
Right of use assets - finance leases	Other assets	$	1,504,109
Accumulated amortization - finance leases	Other assets		(340,100	)
Right of use assets - finance leases, net	Other assets		1,164,009
Total lease assets		$	5,301,264
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	809,632
Current lease liabilities	Accrued expenses and other current liabilities		1,197,874
Long-term debt, net	Long-term debt, net		1,642,975
Long-term lease liabilities	Other non-current liabilities		3,242,548
Total lease liabilities		$	6,893,029

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended          June 30, 2020
Operating lease cost	Cost of revenue	$	299,126
Operating lease cost	Selling, general and administrative expenses		647,587
Operating lease cost	Research and development expenses		209,140
Finance lease cost	Depreciation and amortization and Interest expense		482,390
Total lease costs		$	1,638,243

Maturities of lease liabilities as of June 30, 2020 are as follows:

	Operating Leases			Finance Leases
2021	$	1,328,827		$	947,499
2022		1,130,311			863,678
2023		831,743			744,059
2024		762,849			139,808
2025		377,901		$	—
After 2025		483,792		$	—
Total lease payments		4,915,423			2,695,044
Less: Interest	$	(475,001	)	$	(242,437	)
Present value of lease liabilities	$	4,440,422		$	2,452,607

Future minimum lease payments for operating leases accounted for under ASC 840, “Leases” in excess of one year at June 30, 2019 were as follows:

	June 30, 2019
2020	$	640,135
2021		634,422
2022		352,730
2023		201,800
2024		235,776
After 2024		366,581
Total	$	2,431,444

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The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2020:

Operating lease remaining lease term	3.8 years
Operating lease discount rate		4.53	%
Finance lease remaining lease term	3.0 years
Finance lease discount rate		5.90	%
Cash paid for operating leases	$	875,317
Cash paid for finance leases	$	858,365

NOTE 4 – PIONEER RELATIONSHIP

Distribution and Production Agreements with Pioneer

In 2014, the Company purchased from Pioneer certain assets related to alfalfa and entered into a long-term contract to sell alfalfa seed to Pioneer under a production agreement (GMO varieties) and a distribution agreement (conventional varieties). Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer.  See Note 5 for a discussion of the recognition of revenue under these agreements.  

On May 22, 2019, the Company and Pioneer terminated the production and distribution agreements.  As part of the termination, Pioneer’s parent company, Corteva, agreed to purchase from the Company certain quantities of seed held by the Company as of that date that Pioneer was not previously obligated to purchase. Those quantities of seed will be delivered to Corteva periodically through February 2021.  

The Company does not expect to sell any other products to Pioneer or Corteva beyond those quantities of seed.  

In conjunction with the termination of the Pioneer production and distribution agreements, the Company recorded a $6.0 million impairment charge on its intangible assets related to the Pioneer distribution agreements for the year ended June 30, 2019. In addition, the termination of this relationship was a significant factor leading to the $11.9 million impairment of goodwill.  

License Agreement with Corteva

Contemporaneously with the termination, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. The Company also assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.  Corteva received no license to the Company's other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by the Company.

Payments Due from Corteva and Pioneer

The Company received a payment of $45.0 million in May 2019, $5.55 million in September 2019, $5.55 million in January 2020, and $5.55 million in February 2020 from Pioneer/Corteva, and will receive quarterly payments through February 2021, which total approximately $8.4 million.  Approximately $34.2 million of these amounts referenced above has been allocated to the license to the Company’s alfalfa varieties. The $34.2 million is reported as licensing revenue in the consolidated statement of operations for the year ended June 30, 2019.  

The remaining amounts will be recognized as revenue as the seed is delivered to Corteva through February 2021.  The amount allocated to the seed represents the estimated standalone selling price of those quantities of seed, determined based on the Company’s normal profit margin on the quantities and varieties of seed that Corteva agreed to purchase.  The Company allocated approximately $1.8 million to an unbilled receivable related to revenue

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recognition at contract termination and the remainder of the payments was allocated to the license using a residual method approach.

NOTE 5 - REVENUE RECOGNITION

The Company derives its revenue from 1) the sale of seed, 2) milling and packaging services 3) research and development services and 4) product licensing agreements.

The following table disaggregates the Company's revenue by type of contract¹:

	Years Ended June 30,
	2020		2019
Pioneer product sales	$	19,681,450	$	37,605,215
Other product sales		57,896,346		37,647,297
Licensing		-		34,215,433
Services		2,004,402		254,566
	$	79,582,198	$	109,722,511

For the year ended June 30, 2020, Pioneer product sales consisted of product shipments to Pioneer under the termination agreement discussed in Note 4.

For the year ended June 30, 2019, Pioneer product sales consisted of revenue under the Distribution and Production Agreements.

Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer. The Company concluded that none of the individual activities performed under these contracts were distinct, as the customer was contracting for processed and packaged product.

Until those contracts were terminated in May 2019 (see Note 4), Pioneer submitted a demand plan to the Company in advance of the growing season specifying the amount of seed that it intends to order for the upcoming sales year. The Company was required to use commercially reasonable efforts to arrange for the requisite amount of seed to be grown, processed and packaged. Once the demand plan was submitted, Pioneer was committed to at least that amount of seed. In addition, the Company was not permitted to sell products produced for Pioneer under the agreements to other customers. Therefore, as provided in Topic 606, the Company recognized revenue from these agreements over time in 2019, as it incurred costs to fulfill its obligations.

To the extent the Company produced more product than Pioneer specified in its demand plan, the Company was required to first offer such product to Pioneer. If Pioneer did not purchase such excess product, the Company was permitted to sell the excess product to other customers subject to certain limitations.

The agreements specified prices per finished unit which were adjusted each year, up or down, based on current market conditions, by a maximum of 4% per year. The prices for a given crop year were determined one year in advance of the beginning of the sales season.

The Company concluded that cost was the best measure of progress under these contracts because no other measure adequately reflected the value added to the product by each of the Company's major tasks - having the crop grown, processing, and packaging. As the Company typically contracted out the growing of seed to third parties, the vast majority of the Company's costs under these agreements were incurred, and therefore the vast majority of the revenue from such agreements was recognized, when the raw seed was purchased from the third-party contract growers. The rest of the costs were incurred, and therefore the rest of the revenue was recognized, as the Company processed and packaged the product.  As of the date of the termination of the production and distribution agreements with Pioneer (see Note 4), all seed covered by the active demand plan had been grown, processed and packaged.

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Licensing

Contemporaneously with the termination in Note 4, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties.

Other Product Sales

Revenue from other product sales is recognized at the point in time at which control of the product is transferred to the customer. Generally, this occurs upon shipment of the product. Pricing for such transactions is negotiated and determined at the time the contracts are signed. We have elected the practical expedient that allows us to account for shipping and handling activities as a fulfillment cost, and we accrue those costs when the related revenue is recognized.

The Company has certain contracts with customers that offer a limited right of return on certain branded products. The products must be in an unopened and undamaged state and must be resalable in the sole opinion of the Company to qualify for refund.  Returns are only accepted on product received by August 31^st of the current sales year.  The Company uses a historical returns percentage to estimate the refund liability and records a reduction of revenue in the period in which revenue is recognized.

Services

Revenue from milling services, which are performed on the customer's product, is recognized as services are completed and the milled product is delivered to the customer.

Revenue from conditioning, treating, and packaging services is recognized over time as the services are performed.  Revenue from research and development services is recognized over time as the services are performed. R&D services are generally paid for in advance. In fiscal 2019, R&D revenue relates to a single contract in which the customer may decide annually whether to continue the arrangement. Revenue is recognized straight-line over time, as services are expected to be provided roughly evenly throughout the year.

Payment Terms and Related Balance Sheet Accounts

Accounts receivable represent amounts that are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 120 days for export customers and end of sales season (September 30^th) for branded products sold within the United States. As the period between the transfer of goods and/or services to the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in its contracts with customers.

Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract but is not yet able to invoice the customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements with Pioneer for which the Company recognized revenue over time, as the Company bills for these arrangements upon product delivery, while revenue was recognized, as described above, as costs were incurred. Unbilled receivables may arise as much as three months before billing is expected to occur. Unbilled receivables are generally expected to be generated in the first and second fiscal quarters, and to be billed in the second, third and fourth fiscal quarters.

Losses on accounts receivable and unbilled receivables are recognized if and when it becomes probable that amounts will not be paid. These losses are reversed in subsequent periods if these amounts are paid. During the year ended June 30, 2020, the Company recognized a net gain from collections on amounts previously written off to bad debt expense of $255,000.  During the period ended June 30, 2019, the Company recognized bad debt expense of $996,461 associated with impaired accounts receivable.  

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Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation.  During the year ended June 30, 2020, the Company recognized $9.1 million of revenue that was included in the deferred balance as of June 30, 2019.During the year ended June 30, 2019, the Company recognized $0.2 million of revenue that was included in the deferred balance as of June 30, 2018.

NOTE 6 - BUSINESS COMBINATIONS

Chromatin Acquisition

On October 25, 2018, the Company completed the acquisition of substantially all of the assets of Chromatin, Inc., or together with certain of its subsidiaries and affiliates in receivership, Chromatin, as well as the assumption of certain contracts and limited specified liabilities of Chromatin, for an aggregate cash purchase price of approximately $26.5 million, or the Acquisition, pursuant to the terms of its Asset Purchase Agreement, dated September 14, 2018, with Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, or Novo.

The acquisition expanded the Company's sorghum production capabilities, diversified its product offerings and provided access to new distribution channels.

The Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the Acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of October 25, 2018:

	October 25, 2018
Cash and cash equivalents	$	95,049
Accounts receivable		947,015
Inventories		6,959,936
Prepaid expenses and other current assets		16,501
Property, plant and equipment		10,193,620
Assets held for sale		1,930,400
In-process research and development		380,000
Technology/IP - germplasm		7,200,000
Trade names		150,000
Goodwill		1,573,546
Current liabilities		(2,881,198	)
Noncurrent liabilities		(114,869	)
Total acquisition cost allocated	$	26,450,000

Management determined that one of the facilities acquired as part of the Chromatin acquisition would not be operated and is being held for sale. The components of that facility are:

Land and improvements	$	320,000
Buildings and improvements		1,380,000
Machinery and equipment		332,000
Less: Costs to sell		(101,600	)
Less: Fair value adjustment subsequently recorded		(1,316,093	)
Assets recorded as held for sale that have been subsequently sold	$	614,307

Management expected the sale to be completed within 12 months and planned to pay down a portion of the Company's short-term debt with the proceeds, accordingly, these held for sale assets are presented as current assets. In November 2019, the Company completed the sale of land and buildings of this facility and received net proceeds of $614,307.

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The estimated fair value of accounts receivable acquired is $947,015, with the gross contractual amount totaling $2,164,476, less $1,217,461 expected to be uncollectible. The current liabilities assumed relate to inventory acquired in the acquisition as well as customer deposits. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,573,546, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology, and the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.

Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method, the multi-period excess earnings method, and the replacement cost method. In-process research and development costs are being accounted for as an indefinite lived intangible asset subject to impairment testing until completion or abandonment of research and development efforts associated with the in-process projects. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization.

The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)	Estimated Fair Value
In-process research and development	n/a	$	380,000
Technology/IP - germplasm	30		7,200,000
Trade names	5		150,000
Total identifiable intangible assets		$	7,730,000

The Company incurred acquisitions costs of $1,196,476 during the year ended June 30, 2019 that have been recorded in selling, general and administrative expenses on the consolidated statement of operations. The results of the Chromatin acquisition are included in our consolidated financial statements from the date of acquisition through June 30, 2019. The revenue and net loss (including transaction costs) of Chromatin operations included in our consolidated statements of operations were $12.4 million and $1.7 million, for the period from October 25, 2018 through June 30, 2019.

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Year Ended June 30,
	2019
Revenue	$	111,359,688
Net loss	$	(11,179,299	)

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 includes (i) the elimination of acquisition charges of $1,196,476; (ii) amortization of acquired intangibles of $132,222; and (iii) depreciation of acquired property, plant and equipment of $358,273.

Pasture Genetics Acquisition

On February 24, 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics, the PG Acquisition, for an initial consideration that consisted of an upfront cash payment at closing of USD $7.5 million (AUD $11.4 million). A potential earn-out payment of up to USD $5.3 million (AUD $8.0 million), or the Earn-Out, is payable on September 30, 2022, or the Earn-Out Date. The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5 multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $11.4 million). At S&W Australia’s election, up to 50% of the Earn-Out may be paid in shares of our common stock at a per share purchase price equal to the volume-weighted average purchase price of the Company’s common stock during the 10-day period ending immediately prior to the Earn-Out Date.

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The PG acquisition expanded and diversified the Company's product offerings and provided access to new distribution channels within Australia.

The PG Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the Acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the

acquisition date of February 24, 2020:

	February 24, 2020              (as reported)			Measurement Period Adjustments			February 24, 2020             (as adjusted)
Cash and cash equivalents	$	25,027		$	—		$	25,027
Accounts receivable		3,406,169			94,749			3,500,918
Inventories		6,145,876			(74,473	)		6,071,403
Prepaid expenses and other current assets		191,536			13,625			205,161
Property, plant and equipment		993,525			—			993,525
Right of use assets		—			365,033			365,033
Trade names		428,590			(26,375	)		402,215
Customer relationships		4,351,840			791,244			5,143,084
Goodwill		2,555,175			(1,102,739	)		1,452,436
Accounts payable		(4,254,043	)		219,932			(4,034,111	)
Current liabilities		(1,452,984	)		159,865			(1,293,119	)
Vehicle loans		(544,608	)		-			(544,608	)
Finance leases assumed		-			(365,033	)		(365,033	)
Other noncurrent liabilities		(16,399	)		-			(16,399	)
Total acquisition cost allocated	$	11,829,704		$	75,828		$	11,905,532

The acquisition-date fair value of the consideration transferred consisted of the following:

	February 24, 2020              (as reported)		Measurement Period Adjustments		February 24, 2020             (as adjusted)
Cash paid at closing	$	7,497,645	$	-	$	7,497,645
Contingent earn-out		4,332,059		75,828		4,407,887
Total purchase price	$	11,829,704	$	75,828	$	11,905,532

The estimated fair value of accounts receivable acquired was $3,500,918, with the gross contractual amount totaling $3,610,566, less $109,648 expected to be uncollectible. The current liabilities assumed primarily relate to grower payables as well as employee-related obligations. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,452,436, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to manage the acquired business, the trained workforce and access to new the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.

Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method and the multi-period excess earnings method. The contingent consideration requires the Company to pay up to an additional USD $5.3 million (AUD $8.0 million).  The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5 multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $12.0 million).  The fair value of the contingent consideration arrangement at the acquisition date was $4,407,887. The fair value of the contingent consideration was estimated using a Monte Carlo simulation model. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions in applying the Monte

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Carlo simulation were as follows: 8% present value discount factor and an underlyingnet income volatility of 35%. As of June 30, 2020, the estimated fair value of the contingent consideration is $4,095,702. The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)		Estimated Fair Value
Trade names		5	$	402,215
Customer Relationships		20		5,143,084
Total identifiable intangible assets			$	5,545,299

The Company incurred acquisitions costs of $476,454 during the year ended June 30, 2020 that have been recorded in selling, general and administrative expenses on the consolidated statement of operations. The results of the Pasture Genetics acquisition are included in our consolidated financial statements from the date of acquisition through June 30, 2020.

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Years Ended June 30,
	2020			2019
Revenue	$	88,664,131		$	133,007,762
Net loss	$	(20,299,845	)	$	(9,623,060	)

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2020 include the elimination of acquisition charges of $476,454 and amortization of acquired intangibles of $327,707.

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 include the amortization of acquired intangibles of $327,707.

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2020 on its one reporting unit and determined that goodwill was not impaired.

During the fourth quarter of the year ended June 30, 2019, the Company terminated its production and distribution agreements with Pioneer, thereby triggering a potential indicator of goodwill impairment. As a result, the Company initiated a goodwill impairment test for the year ended June 30, 2019.

The Company compared the carrying value of its invested capital to its estimated fair values at June 30, 2019. The Company estimated the fair value based on the income approach. The discounted cash flows served as the primary basis for the income approach and were based on discrete financial forecasts developed by management. Cash flows beyond the discrete forecast period of ten years were estimated using the perpetuity growth method calculation. The income approach valuation included estimated weighted average cost of capital, which was 10.6%.

Upon completing the impairment test, the Company determined that the fair value of invested capital was less than the carrying value by approximately 10%, thus indicating an impairment. The Company recognized a goodwill impairment charge of $11.9 million for the year ended June 30, 2019, which represented the entire goodwill balance prior to the impairment charge.

The following table summarizes the activity of goodwill for the years ended June 30, 2020 and 2019, respectively.

	Balance at July 1, 2019		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2020
Goodwill	$	—	$	1,452,436	$	—	$	56,239	$	1,508,675

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	Balance at July 1, 2018		Additions		Impairment			Currency Translation Adjustment		Balance at June 30, 2019
Goodwill	$	10,292,265	$	1,573,546	$	(11,865,811	)	$	—	$	—

For the year ended June 30, 2020, the Company determined there was no impairment on its intangible assets. For the year ended June 30, 2019, the Company recorded an impairment charge on its intangible assets of $6.0 million.  Refer to Note 4 for further information.

Intangible assets consist of the following:

	Balance at July 1, 2019		Additions		Impairment		Amortization			Currency Translation Adjustment		Balance at June 30, 2020
Trade name	$	1,205,346	$	402,215	$	—	$	(139,999	)	$	11,716	$	1,479,278
Customer relationships		1,055,747		5,143,084		—		(202,197	)		190,452		6,187,086
Non-compete		30,267		—		—		(8,955	)		—		21,312
GI customer list		64,475		—		—		(7,165	)		—		57,310
Supply agreement		1,002,154		—		—		(75,647	)		—		926,507
Grower relationships		1,647,800		—		—		(105,407	)		—		1,542,393
Intellectual property		26,786,468		—		—		(1,370,803	)		—		25,415,665
In process research and development		380,000		—		—		—			—		380,000
License agreement		—		2,400,863		—		(135,295	)		34,491		2,300,059
Internal use software		542,227		—		—		(67,779	)		—		474,448
	$	32,714,484	$	7,946,162	$	—	$	(2,113,247	)	$	236,659	$	38,784,058

	Balance at July 1, 2018		Additions		Impairment			Amortization			Currency Translation Adjustment		Balance at June 30, 2019
Trade name	$	1,159,826	$	150,000	$	—		$	(104,480	)	$	—	$	1,205,346
Customer relationships		1,156,955		—		—			(101,208	)		—		1,055,747
Non-compete		62,720		—		—			(32,453	)		—		30,267
GI customer list		71,639		—		—			(7,164	)		—		64,475
Supply agreement		1,077,783		—		—			(75,629	)		—		1,002,154
Distribution agreement		6,344,253		—		(5,991,792	)		(352,461	)		—		—
Grower relationships		1,753,208		—		—			(105,408	)		—		1,647,800
Intellectual property		20,873,393		7,200,000		—			(1,286,925	)		—		26,786,468
In process research and development		—		380,000		—			—			—		380,000
Internal use software		610,003		43,000		(43,000	)		(67,776	)		—		542,227
	$	33,109,780	$	7,773,000	$	(6,034,792	)	$	(2,133,504	)	$	—	$	32,714,484

Amortization expense totaled $2,113,247 and $2,133,504 for the years ended June 30, 2020 and 2019, respectively. Estimated aggregate remaining amortization is as follows:

	2021		2022		2023		2024		2025		Thereafter
Amortization expense	$	2,281,149	$	2,228,367	$	2,149,189	$	2,128,729	$	2,083,188	$	27,712,247

Acquisition of Wheat Assets

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On August 15, 2019, the Company entered into several agreements to effectuate the purchase of a wheat breeding program in Australia, or the Wheat Acquisition from Dow AgroScience, or Dow.  In the transaction, the Company acquired:

• A 15-year prepaid license of germplasm.  The license includes commercial, pre-commercial and experimental proprietary wheat populations.

• The right, during the term of the license, to develop future varieties.  The license does not transfer ownership of the existing varieties licensed, but the Company will own any future varieties developed.

• An option to renew the license for five additional years.

• Tangible fixed assets used in the wheat breeding program.

• A contract with a service provider to promote existing commercialized wheat varieties covered by the license.

The wheat market in Australia operates under an End Point Royalty, or EPR, System in which the wheat variety owner earns a fixed royalty on every metric ton of grain produced.  With the Wheat Acquisition, the Company has the right to collect EPR on commercialized wheat varieties included in its license.

The purchase price was approximately $2.6 million, which was paid in cash.  The purchase price was allocated to the assets acquired based on the relative fair value of the license and fixed assets.  $2.4 million was allocated to the license, which will be amortized over 15 years in accordance with the term of the agreement.  The fair value of the license was determined using a discounted cash flow analysis.  $0.2 million was allocated to the fixed assets, which have useful lives of 3-5 years.

The acquired assets did not meet the definition of a business in the Accounting Standards Codification.

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	June 30, 2020			June 30, 2019
Land and improvements	$	2,157,663		$	2,150,085
Buildings and improvements		10,014,879			10,018,108
Machinery and equipment		13,550,413			12,579,698
Vehicles		2,087,634			2,099,814
Leasehold Improvements		552,810			—
Construction in progress		71,316			66,921
Total property, plant and equipment		28,434,715			26,914,626
Less: accumulated depreciation		(7,940,403	)		(6,279,677	)
Property, plant and equipment, net	$	20,494,312		$	20,634,949

Depreciation expense totaled $2,580,234 and $1,995,042 for the years ended June 30, 2020 and 2019, respectively.

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NOTE 9 - DEBT

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2020			June 30, 2019
Working capital lines of credit
KeyBank	$	—		$	2,350,000
CIBC		11,205,664			—
National Australia Bank Limited		16,437,600			8,426,400
National Australia Bank Limited Overdraft Facility		—			351,544
Debt issuance costs		(660,000	)		(372,396	)
Total working capital lines of credit, net	$	26,983,264		$	10,755,548
Current portion of long-term debt
Finance leases	$	809,632		$	563,087
Debt issuance costs		(8,154	)	$	(11,070	)
Term Loan - National Australia    Bank Limited		342,450			73,731
Machinery & equipment loans -    National Australia Bank Limited		272,997			215,519
Vehicle loans - Toyota Finance		200,779			—
Unsecured subordinate promissory note		—			100,000
Secured real estate note - Conterra		202,374			247,942
Debt issuance costs		(39,556	)		(75,707	)
Total current portion, net		1,780,522			1,113,502
Long-term debt, less current portion
Finance leases		1,642,975			1,709,481
Debt issuance costs		(6,923	)		(15,078	)
Term loan - National Australia    Bank Limited		3,082,050			256,303
Machinery & equipment loans -    National Australia Bank Limited		396,404			309,988
Vehicle loans - Toyota Finance		313,470			—
Secured real estate note - Conterra		8,956,885			9,922,269
Debt issuance costs		(56,038	)		(24,869	)
Total long-term portion, net		14,328,823			12,158,095
Total debt, net	$	16,109,345		$	13,271,596

In September 2015, the Company entered into a credit and security agreement, or the KeyBank Credit Facility, with KeyBank. Key provisions of the KeyBank Credit Facility, as amended, included:

• An aggregate principal amount that the Company was able to borrow, repay and reborrow, of up to $45.0 million in the aggregate.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest, were payable in full on December 31, 2020.

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A borrowing base of up to the total of the following: (a) 85% of eligible domestic accounts receivable, plus (b) and 90% of eligible foreign accounts receivable, plus (c) the lesser of (i) 75% of the cost eligible inventoryor (ii) 90% of the net orderly liquidation value of the inventory, plus (d) the amount of any unencumbered cash the Company holds at KeyBank, minus (e) $16.0 million subject to lender reserves.

• Loans were based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.9% per annum for Eurodollar Loans and 1.0% for Base Rate Loans) (both as defined in the KeyBank Credit Facility), generally at the Company’s option. In the event of a default, at the option of KeyBank, the interest rate on all obligations would have increased by 3% per annum over the rate otherwise applicable.

• Subject to certain exceptions, the KeyBank Credit Facility was secured by a first priority perfected security interest in all of the Company’s assets and its domestic subsidiaries, which guaranteed the Company’s obligations under the KeyBank Credit Facility. The KeyBank Credit Facility was further secured by a lien on, and a pledge of, 65% of the stock of its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd.

In connection with the consummation of the Loan Agreement with CIBC described below, the Company terminated the KeyBank Credit Facility on December 26, 2019.  In connection with such termination, the Company paid KeyBank approximately $5.9 million in aggregate principal, interest and fees that were outstanding and payable under the KeyBank Credit Facility at the time of its termination, and all liens on the assets of the Company and its subsidiaries guaranteeing such facility, together with such subsidiary guarantees, were released and terminated.

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with CIBC, which originally provided for a $35.0 million credit facility, or the CIBC Credit Facility.  The Loan Agreement was subsequently amended on September 22, 2020.  As amended, the Loan Agreement provides for a $25.0 million credit facility. The following is a summary of certain terms of the CIBC Credit Facility:

• Advances under the CIBC Credit Facility are to be used: (i) to refinance indebtedness to KeyBank; (ii) to finance the Company’s ongoing working capital requirements; and (iii) for general corporate purposes.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans may be based on (i) a Base Rate plus 0.5% per annum or (ii) LIBOR Rate plus 2.5% per annum (both as defined in the Loan Agreement), generally at the Company’s option. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of the Borrowers’ assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate the Company’s outstanding obligations under the Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

At June 30, 2020, the Company was not in compliance with all CIBC debt covenants. On September 22, 2020, the Company amended the Loan Agreement. Among other things, the amendment provided for a waiver of the Company’s non-compliance with a certain financial covenant. See Note 19 for further discussion on this amendment.

In November 2017, the Company entered into a secured note financing transaction, or the Loan Transaction, with Conterra Agricultural Capital, LLC, or Conterra, for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes, or the Notes, to Conterra as follows:

• Secured Real Estate Note. The Company issued one Note in the principal amount of $10.4 million, or the Secured Real Estate Note, that is secured by a first priority security interest in the property, plant and fixtures,

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or the Real Estate Collateral, located at the Company's Five Points, California and Nampa, Idaho production facilities and its Nampa, Idaho research facilities, or the Facilities. On December 24, 2019, the Company entered into an amendment to extend the maturity date to November 30, 2022, as well as revised the Note’s payments starting July 1, 2020. The Secured Real Estate Note bears interest of 7.75% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. In November 2019, the Company paid down $753,120 of principal. Pursuant to the December 2019 amendment, the Company agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time.

Secured Equipment Note. The Company issued a second Note in the principal amount of $2.1 million, or the Secured Equipment Note, that was secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note was also secured by the Real Estate Collateral. The Secured Equipment Note was scheduled to mature on November 30, 2019. The Secured Equipment Note bore an interest at a rate of 9.5% per annum. The Company agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Secured Equipment Note was repaid in full in August 2018.

On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to its terms, the sale and leaseback transaction was required to be accounted for as a financing arrangement. Accordingly, the proceeds received from American AgCredit were accounted for as proceeds from a debt financing. Under the terms of the transaction:

• The Company sold the equipment to American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a note (in the principal amount of $2,081,527, plus accrued interest of $24,868) held by Conterra, which had an interest rate of 9.5% per annum and was secured by, among other things, the equipment.

• The Company entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an annual interest rate of 5.6%). At the end of the lease term, the Company will repurchase the equipment for $1.

Australian Facilities

S&W Australia and Pasture Genetics both have debt facilities with NAB, all of which are guaranteed by us up to a maximum of AUD $15,000,000 (USD $10,273,500 at June 30, 2020) and cross-guaranteed by S&W Australia and Pasture Genetics.      

S&W Australia.  S&W Australia has a series of debt facilities with NAB providing for up to AUD $25,337,000 (USD $17,353,000) of credit, the key terms of which were amended in February 2020 (in connection with the Pasture Genetics acquisition) and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an Overdraft Facility having a credit limit of AUD $2,000,000 (USD $1,369,800 at June 30, 2020) and (ii) a Borrowing Base Line having a credit limit of AUD $16,000,000 (USD $10,958,400 at June 30, 2020). The seasonal credit facility expires on March 31, 2022. As of June 30, 2020, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.7% per annum calculated daily. The Overdraft Facility permits S&W Australia to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of

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June 30, 2020, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of June 30, 2020, AUD $14,000,000 (USD $9,588,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of S&W Australia. 

• S&W Australia has a flexible rate loan, or the Term Loan, in the amount of AUD $5.0 million (USD $3,424,500 at June 30, 2020). Required annual principal payments of AUD $500,000 on the Term Loan will commence on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.  The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2023 and have interest rates ranging from 3.47% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,369,800) at June 30, 2020.  As of June 30, 2020, AUD $839,869 (USD $575,226) was outstanding under S&W Australia’s master asset finance facility.

• S&W Australia has a Keith Machinery and Equipment Facility for the machinery and equipment used in the operations of the Keith building. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. As of June 30, 2020, AUD $137,503 (USD $94,176) was outstanding under the Keith Machinery and Equipment Facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2020.

Pasture Genetics.  Pasture Genetics has a working capital facility with NAB and a facility with TOYOTA Finance to finance purchase of vehicles.

• Pasture Genetics has a working capital facility with NAB with a credit limit of AUD $10.0 million (USD $6,849,000 at June 30, 2020) and a borrowing base determined from qualified inventory and accounts receivable. The facility will expire on March 31, 2022. Interest will be payable on amounts outstanding under the facility at a floating trade refinance rate quoted by NAB plus 1.5% at the time of each drawdown.  The facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of Pasture Genetics.  As of June 30, 2020, AUD $10.0 million (USD $6,849,000) was outstanding under Pasture Genetics’ working capital facility with NAB.

• Pasture Genetics finances certain vehicle purchases with TOYOTA Finance.  This facility has various maturity dates through 2023 and have interest rates ranging from 4.04% to 5.83%.  As of June 30, 2020, AUD $750,839 (USD $514,249) was outstanding under TOYOTA Finance facility.

Pasture Genetics was in compliance with all debt covenants at June 30, 2020.

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The annual maturities of short-term and long-term debt are as follows:

Fiscal Year	Amount
2021	$	1,828,232
2022		1,768,958
2023		9,985,645
2024		555,441
2025		369,491
Thereafter		1,712,250
Total	$	16,220,017

NOTE 10 - INCOME TAXES

Loss before income taxes consists of the following:

	Years Ended June 30,
	2020			2019
United States	$	(18,778,030	)	$	(9,336,700	)
Foreign		(583,100	)		(164,974	)
Loss before income taxes	$	(19,361,130	)	$	(9,501,674	)

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2020		2019
Current:
Federal	$	—	$	—
State		15,972		28,591
Foreign		369,996		92,744
Total current provision		385,968		121,335
Deferred:
Federal		—		(227,142	)
State		—		(42,940	)
Foreign		—		—
Total deferred provision (benefit)		—		(270,082	)
Provision (Benefit) for income taxes	$	385,968	$	(148,747	)

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The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2020			2019
Tax benefit at statutory tax rate	$	(4,065,839	)	$	(1,995,352	)
State benefit, net of federal benefit		(387,398	)		(304,015	)
Other permanent differences		134,141			23,786
Federal and state research credits - current year		(239,373	)		(228,039	)
Foreign rate differential		170,693			10,819
Shortfall on restricted stock vest		10,526			49,118
Change in unrecognized tax benefit		11,778			49,939
Valuation allowance		4,540,563			2,265,361
Other		210,877			(20,364	)
	$	385,968		$	(148,747	)

Significant components of the Company's deferred tax assets are shown below.

	June 30,
	2020			2019
Deferred tax assets:
Net operating loss carry forwards	$	10,681,884		$	5,817,688
Compensation accruals		478,696			261,365
Allowance for bad debts		1,338,083			1,376,388
Stock compensation		444,725			288,648
Tax credit carry forwards		901,656			662,283
Intangible assets		1,628,858			2,226,539
Lease liability		1,126,905			—
Deferred rent		—			47,226
Assets held for sale		—			367,387
163(j) limitation interest		349,003			—
Other, net		693,637			476,411
Total deferred tax assets		17,643,447			11,523,935
Valuation allowance for deferred tax assets		(14,656,843	)		(9,774,130	)
Deferred tax assets, net of valuation allowance		2,986,604			1,749,805
Deferred tax liabilities
ROU lease asset		(1,253,577	)		—
Fixed assets		(1,733,027	)		(1,749,805	)
Total deferred tax liabilities		(2,986,604	)		(1,749,805	)
Net deferred tax asset / (liability)	$	—		$	—

The Company recognizes federal and state current tax liabilities or assets based on its estimate of taxes payable to or refundable from tax authorities in the current fiscal year.  The Company also recognizes federal and state deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards.  The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

The Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future

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taxable income and planning strategies in making this assessment. Based on projections of taxable income, the Company had previously determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a full valuation allowance was recorded as of June 30, 2017.  The Company’s valuation allowance position has not changed for the years ended June 30, 2020 and June 30, 2019, respectively, as the Company does not believe that it is more likely than not that it will realize its deferred tax assets.  The valuation allowance increased by approximately $4.9 million for the year ended June 30, 2020, related primarily to net operating losses generated in the current year.

The U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on a corporation's ability to utilize net operating loss carryovers ("NOLs") if it experiences an ownership change as defined in Section 382.  In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three-year period.  In the event that an ownership change has occurred, or were to occur, utilization of the Company’s NOLs would be subject to an annual limitation under Section 382 as determined by multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate as defined in the Internal Revenue Code.  Any unused annual limitation may be carried over to later years.  The Company could experience an ownership change under Section 382 as a result of events in the past in combination with events in the future.  If so, the use of the Company’s NOLs, or a portion thereof, against future taxable income may be subject to an annual limitation under Section 382, which may result in expiration of a portion of the NOLs before utilization.  To the extent our use of net operating loss carryforwards is significantly limited under the rules of Section 382, our income could be subject to U.S. corporate income tax earlier than it would if we were able to use net operating loss carryforwards, which could result in lower profits.  Any carryforwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance.  As of June 30, 2020, the Company is not aware of any applicable Section 382 limitations that may exist on its net operating losses.

As of June 30, 2020, the Company had federal and state net operating loss carryovers of approximately $44.1 million and $15.7 million, respectively, which will begin to expire June 30, 2030, unless previously utilized. A portion of the federal net operating losses generated after June 30, 2018 can be carried forward indefinitely as a result of the Tax Cuts and Jobs Act. Therefore, approximately $24.5 million of net operating loss carryovers are not subject to expiration. The Company has federal research credits of $881,836 which will expire June 30, 2031, unless previously utilized. The Company also has foreign tax credits of $157,859 which will begin to expire June 30, 2023, unless previously utilized. The Company has state research credits of $25,089 that do not expire. The Company also has Australian net operating loss carryover of approximately $0.9 million as of the year ended June 30, 2020 that do not expire. In addition, the Company has $1.6 million of Section 163(j) interest limitation carryovers as of June 30, 2020 which do not expire.

As of June 30, 2020, the Company has not provided for foreign withholding taxes on approximately $2.9 million of undistributed earnings of its foreign subsidiaries, as these earnings are considered indefinitely reinvested outside of the United States. The Company does not plan to repatriate any earnings that are currently located in its foreign subsidiaries as of June 30, 2020.  However, to the extent that the foreign subsidiaries accrue earnings and profits in the future years, the Company does plan to repatriate a portion of those funds to the U. S. and will record withholding taxes as those earnings and profits are incurred.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.  

The Company has approximately $79,341 of unrecognized tax benefits related to current year tax positions as of June 30, 2020. Included in the unrecognized tax benefits was approximately $62,679 of tax benefits that, if recognized, would reduce our annual effective tax rate, if the Company were not in a valuation allowance position.

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However, as the Company is in a full valuation allowance position, there would be no impact to the annual effective tax rate if the tax benefits were recognized.

The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued interest and penalties associated with uncertain tax positions as of June 30, 2020 and 2019. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

CARES Act

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act.  The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. Some of the more significant changes include the ability to carryback net operating losses, the acceleration of AMT credit receivables, and the ability to take 100% bonus on qualified improvement property ("QIP"). Of these highlighted provisions, the Company has only recognized the provisional impact of the 100% bonus on QIP. With respect to the 163(j) limitation implemented as part of the Tax Cuts and Jobs Act, companies were previously limited to deducting interest to thirty percent of adjusted taxable income per year.  However, with the passage of the CARES Act, companies may elect to use fifty percent of adjusted taxable income in order to calculate the allowable interest deduction for years 2019 and 2020.  These CARES Act provisions did not impact the Company’s tax expense calculations or related income tax account balances.  

NOTE 11 - WARRANTS

The following table summarizes the total warrants outstanding at June 30, 2020:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2019		New Issuances		Expired			Outstanding as of June 30, 2020
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		(2,699,999	)		—
						2,699,999		—		(2,699,999	)		—

The following table summarizes the total warrants outstanding at June 30, 2019:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2018		New Issuances		Expired		Outstanding as of June 30, 2019
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		—		2,699,999
						2,699,999		—		—		2,699,999

NOTE 12 - EQUITY

On September 5, 2018, the Company entered into a Securities Purchase Agreement, or the Securities Purchase Agreement, with MFP Partners, L.P., or MFP, pursuant to which the Company sold to MFP 1,607,717 shares of common stock of the Company, or the Common Shares, at a purchase price of $3.11 per share at an initial closing, and agreed to sell, subject to the satisfaction of certain conditions, 7,235 shares of newly designated Series A Convertible Preferred Stock of the Company, or the Preferred Shares, to MFP at a purchase price of $3,110 per share at a second closing, or the Second Closing.

The Second Closing was completed on October 23, 2018, for aggregate gross proceeds of approximately $22.5 million, which was used primarily to fund the Chromatin Acquisition. The Preferred Shares carried no voting rights and were automatically convertible into shares of common stock at the rate of 1,000 shares of common stock per Preferred Share upon the approval of the Company's stockholders for the issuance of the requisite shares of common stock. Pursuant to the Securities Purchase Agreement, the Company agreed to use its reasonable best efforts to solicit the approval of its shareholders for the issuance of stock upon the conversion of the Preferred Shares at a special meeting of shareholders, and at each annual meeting of shareholders thereafter, if necessary.  Approval was

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obtained at a Special Meeting of Stockholders held on November 20, 2018, and the Preferred Shares automatically converted into 7,235,000 shares of common stock on that same day.

NOTE 13 - FOREIGN CURRENCY CONTRACTS

The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $7,047,514 at June 30, 2020 and their maturities range from July to November 2020.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract liabilities totaled $35,218 at June 30, 2020 and foreign currency contract liabilities totaled $42,255 at June 30, 2019. The Company recorded a gain on foreign exchange contracts of $7,615 and $52,788, which is reflected in cost of revenue for the years ended June 30, 2020 and 2019, respectively.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Contingencies

Based on information currently available, management is not aware of any other matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

Legal Matters

The Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote.

NOTE 15 - RELATED PARTY TRANSACTIONS

On September 5, 2018, the Company entered into the Securities Purchase Agreement with MFP, pursuant to which the Company sold the Common Shares at the Initial Closing and the Preferred Shares at the Second Closing. The Initial Closing was completed on September 5, 2018 and the Second Closing was completed on October 23, 2018. See Note 12 for further discussion on the Second Closing.

On December 18, 2018, the Company entered into a Loan and Security Agreement, or the MFP Loan Agreement, with MFP, pursuant to which the Company was able to borrow up to $5,000,000, in minimum increments of $1,000,000, from MFP during the period beginning on December 18, 2018 and ending on the earlier to occur of (i) March 18, 2019 and (ii) certain specified events of default. Pursuant to the MFP Loan Agreement, interest accrued on outstanding principal at a fixed per annum rate of 6.0%. In addition, the Company was obligated to pay to MFP a fee equal to 2.0% of each advance under the MFP Loan Agreement. Concurrently with the execution of the MFP Loan Agreement, the Company drew down $1,000,000 under the MFP Loan Agreement, which was disbursed to the Company on December 21, 2018. On December 31, 2018, the Company repaid in full the $1,000,000 disbursed to the Company. As of June 30, 2019, no amounts remained outstanding under the MFP Loan Agreement.

NOTE 16 - EQUITY-BASED COMPENSATION

Equity Incentive Plans

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan, or as amended and/or restated from time to time, the 2009 Plan. The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012

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and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares.

In January 2019, the Company's Board of Directors and stockholders approved the 2019 Equity Incentive Plan, or 2019 Plan, as a successor to and continuation of the 2009 Plan. Subject to adjustment for certain changes in the Company's capitalization, the aggregate number of shares of the Company's common stock that may be issued under the 2019 Plan will not exceed 4,243,790 shares, which is the sum of (i) 2,750,000 new shares, plus (ii) 350,343 shares that remained available for grant under the 2009 Plan as of January 16, 2019, plus (iii) 1,143,447 shares subject to outstanding stock awards granted under the 2009 Plan.

The term of incentive stock options granted under the Company’s equity incentive plans may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the Company’s equity incentive plans must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period.

The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants.

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	June 30,
	2020			2019
Risk free rate	0.3%-1.66%			1.9% - 3.0%
Dividend yield		0	%		0	%
Volatility	39.4%-48.9%			34.5% - 41.5%
Average forfeiture assumptions		1.1	%		1.1	%

During the year ended June 30, 2020, the Company granted 1,899,934 options to its directors, certain members of the executive management team and other employees at exercise prices ranging from $2.26 - $2.37. These options vest in either quarterly or annual periods over one to three years, and expire ten years from the date of grant.

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A summary of stock option activity for the years ended June 30, 2020and 2019is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2018		792,074		$	4.55		6.3	$	10,413
Granted		497,178			2.85		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(166,500	)		6.17		—		—
Outstanding at June 30, 2019		1,122,752			3.55		8.0		34,135
Granted		1,899,934			2.36		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(146,792	)		4.12		—		—
Outstanding at June 30, 2020		2,875,894			2.74		8.6		22,409
Options vested and exercisable at June 30, 2020		1,079,783			3.21		7.6		—
Options vested and expected to vest as of    June 30, 2020		2,866,236		$	2.72		8.6	$	22,311

The weighted average grant date fair value of options granted and outstanding at June 30, 2020 was $0.78. At June 30, 2020, the Company had $1,291,135 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 2.13 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the years ended June 30, 2020 and 2019, the Company issued 417,933 and 175,758 restricted stock units to its directors, certain members of the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to quarterly or annual installments over one to three-years. The fair value of the awards during the years ended June 30, 2020 and 2019 totaled $940,700 and $472,171, respectively, and was based on the closing stock price on the date of grants.

The Company recorded $700,724 and $379,212 of stock-based compensation expense associated with grants of restricted stock units during the years ended June 30, 2020 and 2019, respectively. A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2018		89,193		$	3.98		1.1
Granted		175,758			2.69		2.8
Vested		(107,747	)		3.75		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2019		157,204			2.69		1.4
Granted		417,933			2.25		2.8
Vested		(177,010	)		2.45		—
Forfeited		(1,324	)		2.83		—
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6

At June 30, 2020, the Company had $705,197 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.55 years.

At June 30, 2020, there were 824,840 shares available under the 2019 Plan for future grants and awards.

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Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the years ended June 30, 2020and 2019, totaled $1,167,951and $694,610, respectively.

NOTE 17 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the years ended June 30, 2020 and 2019, respectively.

	Years Ended June 30,
	2020			2019
Purchases of equipment classified as finance lease		(468,390	)		(574,018	)
Contingent consideration issued		(4,407,887	)		—

NOTE 18 – PAYCHECK PROTECTION PROGRAM

In response to the COVID-19 pandemic, the PPP was established under the CARES Act and administered by the SBA. Companies who met the eligibility requirements set forth by the PPP could qualify for PPP loans. If the loan proceeds are fully utilized to pay qualified expenses, the full principal amount of the PPP loan, along with any accrued interest, may qualify for loan forgiveness, subject to potential reduction based on the level of full-time employees maintained by the organization.

In April 2020, the Company received a loan of $1,958,600 under the PPP provided by CIBC. The loan bears interest at 1.0%, with principal and interest payments deferred for the first six months of the loan.  After that, the loan and interest would be paid back over a period of 18 months, if the loan is not forgiven under the terms of the PPP.  

When it applied for the loan, the Company believed it would qualify to have the loan forgiven under the terms of PPP, and therefore considered the loan to be substantively a conditional government grant.  The Company has performed initial calculations for PPP loan forgiveness, and expects that the PPP loan will be forgiven in full because 1) the Company has, prior to June 30, 2020, utilized all of the proceeds for payroll and other qualified expenses and 2) the Company believes it will continue to comply with other terms and conditions necessary for forgiveness.

As such, the Company has decided that the PPP loan should be accounted for as a government grant.  As US GAAP does not contain guidance on the accounting for government grants, the Company is following the guidance in International Accounting Standards, or IAS, 20, Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS 20, “a forgivable loan from government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.” As discussed above, the Company believes there is reasonable assurance it will meet the terms of forgiveness.  Under IAS 20, government grants are recognized in income as required activities are undertaken.  As the Company believes that it completed the required activities by utilizing PPP proceeds for payroll and other qualified expenditures prior to June 30, 2020, it has recognized PPP grant income for the full amount of the PPP loan, $1,958,600, and no liability for the PPP loan is reflected in the consolidated balance sheet as of June 30, 2020.  

The Company plans to submit the PPP loan forgiveness application in the near term.  Although the Company believes it is probable that the PPP loan will be forgiven, the Company’s actions and information must be evaluated by the lender and SBA before forgiveness is formally granted.  

NOTE 19 - SUBSEQUENT EVENTS

On September 22, 2020, the Company entered into a First Amendment to Loan and Security Agreement with CIBC, which amended the Loan Agreement. Pursuant to this amendment, the Company and CIBC agreed to:

• decrease the amount of the revolving credit facility from $35.0 million to $25.0 million;

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• decrease the amount of the inventory sublimit under the revolving credit facility from $25.0 million to $12.5 million;

• increase the interest rate by 0.5% (from prime plus .50% to prime plus 1.00% and from LIBOR plus 2.50% to LIBOR plus 3.00%), and introduce a 1.0% LIBOR floor;

• suspend the Company’s financial covenant to maintain a fixed charge coverage ratio equal to or greater than 1.10 to 1.00 until the quarter ending March 31, 2021, and waive the Company’s noncompliance with this covenant for the quarter ending June 30, 2020;

• provide that, following the fiscal quarter ending March 31, 2021, the Company must maintain a fixed charge coverage equal to or greater than 1.15 to 1.00;

• include a financial covenant requiring the Company to maintain year-to-date EBITDA of no less than negative $6,000,000, tested quarterly, commencing with the quarter ending September 30, 2020 through and including December 31, 2020 (this covenant will not apply for periods after December 31, 2020); and

• increase the availability reserve from $5.0 million to $7.5 million upon closing, which will further increase by $500 thousand on the last day of each month commencing November 1, 2020 until the total availability reserve reaches $10 million.

Except as modified by the foregoing amendment, all terms and conditions of the Loan Agreement remain in full force and effect.

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Item 9. Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2020, or the Evaluation Date. The term “disclosure controls and procedures,” as defined in Rules 13a‑15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2020, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our Principal Executive Officer and our Principal Financial Officer, an assessment, including testing of the effectiveness, of our internal control over financial reporting as of the Evaluation Date. Management’s assessment of internal control over financial reporting was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework, or 2013 Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with our management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we have not identified any material weaknesses in our internal control over financial reporting as of the Evaluation Date. We have thus concluded that our internal control over financial reporting was effective as of the Evaluation Date.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or in other factors that occurred during the period of our evaluation that have significantly affected, or are reasonably likely to significantly affect, our internal control over financial reporting.

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Item 9B. Other Information

On September 22, 2020, we entered into a First Amendment to Loan and Security Agreement with CIBC Bank USA, or CIBC, which amended our Loan and Security Agreement, dated December 26, 2019, among us, Seed Holding, LLC, Stevia California, LLC and CIBC. Pursuant to this amendment, the parties agreed to:

• decrease the amount of the revolving credit facility from $35.0 million to $25.0 million;

• decrease the amount of the inventory sublimit under the revolving credit facility from $25.0 million to $12.5 million;

• increase the interest rate by 0.5% (from prime plus .50% to prime plus 1.00% and from LIBOR plus 2.50% to LIBOR plus 3.00%), and introduce a 1.0% LIBOR floor;

• suspend our financial covenant to maintain a fixed charge coverage ratio equal to or greater than 1.10 to 1.00 until the quarter ending March 31, 2021, and waive our noncompliance with this covenant for the quarter ending June 30, 2020;

• provide that, following the fiscal quarter ending March 31, 2021, we must maintain a fixed charge coverage equal to or greater than 1.15 to 1.00;

• include a financial covenant requiring us to maintain year-to-date EBITDA of no less than negative $6,000,000, tested quarterly, commencing with the quarter ending September 30, 2020 through and including December 31, 2020 (this covenant will not apply for periods after December 31, 2020); and

• increase the availability reserve from $5.0 million to $7.5 million upon closing, which will further increase by $500 thousand on the last day of each month commencing November 1, 2020 until the total availability reserve reaches $10 million.

Except as modified by the foregoing amendment, all terms and conditions of the loan agreement with CIBC remain in full force and effect.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Item 10 regarding directors, executive officers, promoters and control persons is incorporated by reference to the information appearing under the caption "Directors and Executive Officers" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Our written Code of Ethics applies to all of our directors and employees, including our executive officers, including without limitation our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Ethics is available on our website at http://www.swseedco.com in the Investors section under "Corporate Governance." Changes to or waivers of the Code of Ethics will be disclosed on the same website. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the Code of Ethics by disclosing such information on the same website.

Item 11. Executive Compensation

The information required by Item 11 is incorporated by reference to the information appearing under the caption "Executive Compensation" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 is incorporated by reference to the information appearing under the caption "Security Ownership" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 is incorporated by reference to the information appearing under the caption "Certain Relationships and Related Transactions" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 14. Principal Accountant Fees and Services

The information required by Item 14 is incorporated by reference to the information appearing under the caption "Principal Accounting Fees and Services" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Financial Statements:

Reference is made to the Index to Consolidated Financial Statements of S&W Seed Company under Item 8 in Part II of this Form 10-K.

(2) Financial Statement Schedules:

As a smaller reporting company, no financial statement schedules are required.

(3) Exhibits:

The information required by this Section (a)(3) of Item 15 is incorporated by reference or filed with this report as set forth on the exhibit index that follows below.

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(b) Exhibits

INDEX TO EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	SEC File Number	Exhibit Number	Filing Date	Filed Herewith
2.1	Asset Acquisition Agreement among the Registrant, Imperial Valley Seeds, Inc. (“IVS”), Glen D. Bornt, Fred Fabre and the Bornt Family Trust, dated September 28, 2012	8-K	001-34719	2.1	10/2/12
2.2†	Asset Purchase and Sale Agreement between the Registrant and Pioneer Hi-Bred International, Inc. (“Pioneer”), dated December 19, 2014	8-K	001-34719	2.1	12/29/14
2.3†	First Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	2.1	1/7/15
2.4	Second Amendment to the Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated April 23, 2015	10-K	001-34719	2.6	9/28/15
2.5	Third Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated July 23, 2015	10-K	001-34719	2.7	9/28/15
2.6	Fourth Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated December 4, 2017	10-Q	001-34719	2.1	2/8/18
2.7	Asset Acquisition Agreement between the Registrant, SV Genetics Pty Ltd, Seed Genetics International Pty Ltd, David John Holman, Alan Irvine Scott, Trevor Bailie, Bottrell Precision Ventures, LLC and James R. Bennett, dated May 27, 2016	8-K	001-34719	2.1	5/31/16
2.8	Asset Purchase Agreement by and between Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, Inc., dated September 5, 2018	10-K	001-34719	2.8	9/20/18
2.9	Asset Purchase Agreement by and between Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, Inc., dated September 14, 2018	10-K	001-34719	2.9	9/20/18
2.10	Share Sale Agreement by and among S&W Seed Company Australia Pty Ltd, a wholly owned subsidiary of the Registrant, Ann Elizabeth Damin and Robert Damin, dated February 18, 2020	10-Q	001-34719	10.1	5/14/20
3.1	Registrant’s Articles of Incorporation	8-K	001-34719	3.1	12/19/11

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3.2	Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock	8-K	001-34719	3.1	10/25/18
3.3	Registrant’s Second Amended and Restated Bylaws, together with Amendment One thereto	10-Q	001-34719	3.3	5/14/20
4.1	Reference is made to Exhibits 3.1, 3.2 and 3.3
4.2	Form of Common Stock Certificate	S-3	333-219726	4.3	8/4/17
4.3	Description of Common Stock					X
10.1†	Non-Exclusive Alfalfa Licensing and Assignment Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.4	1/7/15
10.2†	Information Technology Transition Services Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.6	1/7/15
10.3	Patent License Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.11	1/7/15
10.4	Patent Assignment Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.12	1/7/15
10.5	Know-How Transfer Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.13	1/7/15
10.6	Data Transfer Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.14	1/7/15
10.7	Assignment Agreement of Plant Variety Certificates, Plant Breeders’ Rights, Maintenance Rights and Registration Rights between the Registrant, Pioneer Overseas Corporation and Pioneer, dated December 31, 2014	8-K	001-34719	10.15	1/7/15
10.8	First Amendment to the Assignment Agreement of Plant Variety Certificates, Plant Breeders’ Rights, Maintenance Rights and Registration Rights between the Registrant, Pioneer Overseas Corporation and Pioneer, dated April 23, 2015	10-K	001-34719	10.25	9/28/15

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10.9	Assignment and Assumption Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.16	1/7/15
10.10	Form of Indemnification Agreement with Officers, Directors and Employees of the Registrant and Subsidiaries	8-K	001-34719	10.1	7/24/14
10.11*	Amended and Restated 2009 Equity Incentive Plan as amended through Amendment No. 2, forms of Stock Option Grant and Agreement, Restricted Stock Unit Grant and Restricted Stock Award	10-K	001-34719	10.34	9/28/15
10.12*	S&W Seed Company 2019 Equity Incentive Plan (the “Plan”)	S-8	333-229625	99.1	2/12/19
10.13*	Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Plan.	S-8	333-229625	99.2	2/12/19
10.14*	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the Plan.	S-8	333-229625	99.3	2/12/19
10.15*	Employment Agreement between the Registrant and Matthew K. Szot, dated April 24, 2019	10-Q	001-34719	10.4	5/9/19
10.16*	Employment Agreement between the Registrant and Mark W. Wong, dated June 19, 2017	10-K	001-34719	10.35	9/20/17
10.17*	Offer Letter between the Company and Donald Panter, dated October 22, 2018	10-K/A	001-34719	10.83	10/28/19
10.18*	Offer Letter between the Company and David Callachor, dated October 22, 2018	10-K/A	001-34719	10.84	10/28/19
10.19†	Collaboration Agreement between the Registrant and Calyxt, Inc., dated May 28, 2015 and entered into by the Registrant on June 3, 2015	10-K	001-34719	10.39	9/28/15
10.20	Registration Rights Agreement between the Registrant and the investors named therein, dated July 19, 2017	8-K	001-34719	99.2	7/20/17
10.21	Registration Rights Agreement by and between the Registrant and Mark W. Wong, dated October 11, 2017	8-K	001-34719	99.2	10/12/17

95

10.22	Secured Promissory Notes issued by the Registrant in favor of Conterra Agricultural Capital, LLC, dated November 30, 2017 and related documents	10-Q	001-34719	10.5	2/8/18
10.23	Registration Rights Agreement by and between the Registrant and MFP Partners, L.P., dated December 22, 2017	S-3	333-222916	4.17	2/7/18
10.24	Sale and Lease Agreement by and between the Registrant and American AgCredit, dated August 9, 2018	10-K	001-34719	10.73	9/20/18
10.25	Registration Rights Agreement dated September 5, 2018, by and among the Registrant and MFP Partners, L.P.	8-K	001-34719	10.3	9/6/18
10.26††	Loan and Security Agreement by and among the Registrant, Seed Holding, LLC, Stevia California, LLC, and CIBC Bank USA, dated December 26, 2019	10-Q	001-34719	10.1	2/12/20
10.27	First Amendment to Loan and Security Agreement by and among the Registrant, Seed Holding, LLC, Stevia California, LLC, and CIBC Bank USA, dated September 22, 2020					X
10.28	Amendment to Note between the Registrant and Rooster Capital LLC, dated December 24, 2019	10-Q	001-34719	10.2	2/12/20
10.29	Business Letter of Offer between National Australia Bank Limited and S&W Seed Company Australia Pty Ltd, dated February 17, 2020					X
10.30	Business Letter of Offer between National Australia Bank Limited and Pasture Genetics Ptd Ltd, dated February 17, 2020					X
10.31††	Termination Agreement by and between the Registrant and Pioneer Hi-Bred International, Inc., effective as of May 20, 2019					X
10.32††	Alfalfa License Agreement by and between the Registrant and Pioneer Hi-Bred International, Inc., effective as of May 20, 2019					X
21.1	Subsidiaries of the Registrant					X
23.1	Consent of Independent Registered Public Accounting Firm					X
24.1	Power of Attorney (see signature page)					X
31.1	Chief Executive Officer Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended					X

96

31.2	Chief Financial Officer Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended	X
32.1**	Chief Executive Officer Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2**	Chief Financial Officer Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101	The following materials from the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2020 and June 30, 2019; (ii) the Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2020 and 2019; (iii) the Consolidated Statements of Comprehensive (Loss) Income for the Fiscal Years Ended June 30, 2020 and 2019; (iv) the Consolidated Statement of Stockholders' Equity; (v) the Consolidated Statement of Cash Flows for the Fiscal Years Ended June 30, 2020 and 2019; and (vi) the Notes to Consolidated Financial Statements	X

† Portions of this exhibit have been omitted pursuant to an Order Granting Confidential Treatment under the Securities Exchange Act of 1934, as amended.

†† Certain portions of this exhibit (indicated by “[***]”) have been omitted as the Registrant as determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Registrant if publicly disclosed

* Management contract or compensatory plan or arrangement.

** This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

Item 16. Form 10-K Summary

None.

97

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  September 23, 2020

S&W SEED COMPANY
By:	/s/ Mark W. Wong
	Mark W. Wong
	President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark W. Wong and Matthew K. Szot, or any of them, his attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark W. Wong	President, Chief Executive Officer and Director (Principal Executive Officer)	September 23, 2020
Mark W. Wong
/s/ Matthew K. Szot	Executive Vice President, Finance and Administration and Chief Financial Officer (Principal Financial and Accounting Officer)	September 23, 2020
Matthew K. Szot
/s/ Mark J. Harvey	Chairman of the Board	September 23, 2020
Mark J. Harvey
/s/ David A. Fischhoff	Director	September 23, 2020
David A. Fischhoff
/s/ Consuelo E. Madere	Director	September 23, 2020
Consuelo E. Madere
/s/ Alexander C. Matina	Director	September 23, 2020
Alexander C. Matina
/s/ Charles B. Seidler	Director	September 23, 2020
Charles B. Seidler
/s/ Robert D. Straus	Director	September 23, 2020
Robert D. Straus
/s/ Alan D. Willits	Director	September 23, 2020
Alan Willits

98

EX-4.3

Exhibit 4.3

DESCRIPTION OF COMMON STOCK  

General

The following description summarizes the most important terms of our common stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters set forth in this “Description of Common Stock,” you should refer to our articles of incorporation (the “articles of incorporation”), and second amended and restated bylaws, as amended (the “bylaws”), which are included as exhibits to our Annual Report on Form 10-K, and to the applicable provisions of Nevada law. Our authorized capital stock consists of 50,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share. Our board of directors is authorized, without stockholder approval, except as required by the listing standards of The Nasdaq Stock Market LLC, to issue additional shares of our capital stock.  

Common Stock

Voting Rights. Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. Our bylaws provide that in contested director elections (meaning elections in which the number of nominees exceeds the number of directors to be elected), directors are elected by a plurality of the votes cast, and the nominees receiving the greatest numbers of votes are elected to serve as directors. Our bylaws further provide that our directors are elected in uncontested elections by a majority of the votes cast, meaning that a director nominee will be elected if the number of votes cast for that nominee’s election exceeds the number of votes cast against that nominee’s election.

Dividends. Subject to the preference in dividend rights of any series of preferred stock that we may issue in the future, the holders of common stock are entitled to receive such cash dividends, if any, as may be declared by our board of directors out of legally available funds.

Liquidation. In the event of any liquidation, dissolution or winding up, after payment of all debts and liabilities and after payment of the liquidation preferences of any shares of preferred stock then outstanding, the holders of the common stock will be entitled to participate pro rata in all assets that are legally available for distribution.

Rights and Preferences. Holders of common stock have no preemptive, subscription, redemption, sinking fund or conversion rights and are not subject to further calls or assessments. The rights and preferences of holders of common stock will be subject to the rights of any series of preferred stock that we may issue in the future.

Preferred Stock

Our board of directors, without any vote or action by our stockholders, has the authority to designate and issue up to an aggregate of 5,000,000 shares of preferred stock from time to time, in one or more classes or series or shares, on terms that it may determine, including among other things:

• its dividend rate;

• its liquidation preference;

• whether or not the shares will be convertible into, or exchangeable for, any other securities;

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• whether or not the shares will be subject to any restrictions on the repurchase or redemption of such shares while there is any arrearage in the payment of dividends or sinking fund installments; and

• whether or not the shares will have voting rights, and, if so, determine the extent of the voting powers and the conditions under which the shares will vote as a separate class.

Our board of directors could issue all or part of the preferred stock with, among other things, substantial voting power or advantageous conversion rights. This stock could be issued to persons deemed by our board of directors likely to support our current management in a context for control of us, either as a precautionary measure or in response to a specific takeover threat.  The issuance of preferred stock could adversely affect the voting power of holders of common stock or reduce the likelihood that common stockholders would receive distributions or other payments upon liquidation. Any such issuance could have the effect of decreasing the market price of the common stock. The issuance of preferred stock also could have the effect of delaying, deterring or preventing a change in control.

Anti-Takeover Effects of Certain Provisions of Nevada Law and Our Articles of Incorporation and Bylaws

Anti-Takeover Effects of Certain Provisions of Nevada Law and Nevada Anti-takeover Statutes.

Certain provisions of the Nevada Revised Statutes, or NRS, as described below, may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests.

Combinations with Interested Stockholders Statutes

Nevada’s “combinations with interested stockholders” statutes, NRS 78.411 through 78.444, inclusive, prohibit specified types of business “combinations” between certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after such person first becomes an “interested stockholder” unless (1) the corporation’s board of directors approves, in advance, either the combination itself, or the transaction by which such person becomes an interested stockholder, or (2) the combination is approved by the board of directors and 60% of the then-outstanding voting power of the corporation’s stockholders not beneficially owned by the interested stockholder, its affiliates and associates. Further, in the absence of the prior approval described above, certain restrictions may apply even after such two-year period. However, these statutes do not apply to any combination of a corporation and an interested stockholder after the expiration of four years after the person first became an interested stockholder.

For purposes of these statutes, an “interested stockholder” is any person who is (1) the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the corporation. The definition of the term “combination” is sufficiently broad to cover most significant transactions between a corporation and an interested stockholder. These statutes generally apply to “resident domestic corporations,” namely Nevada corporations with 200 or more stockholders of record. However, a Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if such election is not made in the corporation’s original articles of incorporation, the amendment (1) must be approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until 18 months after the

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vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment.

Our original articles of incorporation include a provision providing that at such time, if any, that we become a “resident domestic corporation” as defined in the NRS, we will not be subject to, or governed by, any of the provisions of NRS 78.411 to 78.444, inclusive, as amended from time to time, or any successor statute.  As a result, pursuant to NRS 78.434, the “combinations with interested stockholders” statutes will not apply to us, unless our articles of incorporation are subsequently amended to provide that we are subject to those provisions.

Acquisition of Controlling Interest Statutes

Nevada’s “acquisition of controlling interest” statutes, NRS 78.378 through 78.3793, inclusive, contain provisions governing the acquisition of stockholder voting power above specified thresholds in certain Nevada corporations. These “control share” laws provide generally that any person that acquires a “controlling interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights. These laws provide that a person acquires a “controlling interest” whenever a person acquires shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1) one-fifth or more, but less than one-third, (2) one-third or more, but less than a majority or (3) a majority or more, of all of the voting power of the corporation in the election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares” to which the voting restrictions described above apply.

In our bylaws, we have elected not to be governed by, and to otherwise opt out of, the provisions of NRS 78.378 to 78.3793, inclusive. Absent such provision in our bylaws, these statutes would apply to us as of a particular date if we were to have 200 or more stockholders of record (at least 100 of whom have addresses in Nevada appearing on our stock ledger at all times during the 90 days immediately preceding that date) and do business in the State of Nevada directly or through an affiliated corporation, unless our articles of incorporation or bylaws in effect on the tenth day after the acquisition of a controlling interest provide otherwise.

NRS 78.139(4) also provides that directors of a Nevada corporation may resist a change or potential change in control of the corporation if the board of directors determines that the change or potential change is opposed to, or not in, the best interest of the corporation upon consideration of any relevant facts, circumstances, contingencies or constituencies that the directors are entitled, but not required, to consider when exercising their directorial powers pursuant to NRS 78.138(4).

The existence of the foregoing provisions and other potential anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.

Articles of Incorporation and Bylaw Provisions.

Our articles of incorporation and bylaws contain provisions that might have an anti-takeover effect. These provisions, which are summarized below, may have the effect of delaying, deterring or preventing a change in control of our company. They could also impede a transaction in which our stockholders might receive a premium over the then-current market price of our common stock and our stockholders’ ability to approve transactions that they consider to be in their best interests.

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Articles of Incorporation. Our authorized but unissued shares of common stock and preferred stock are available for our board of directors to issue without stockholder approval. We may use these additional shares for a variety of corporate purposes, including future public or private offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of our authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of our company by means of a proxy contest, tender offer, merger or other transaction. Our authorized but unissued shares may be used to delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

Bylaws. Certain provisions of our bylaws may be considered to have anti-takeover effects, including advance notice requirements for director nominations and other stockholder proposals. Our bylaws establish advance notice procedures for stockholder proposals to be brought before an annual meeting of stockholders, and for proposed nominations of candidates for election to our board of directors at an annual or special meeting of stockholders. Generally, such notices must be received by our corporate secretary at our principal executive offices, in the case of an annual meeting, between 90 days and 120 days prior to the first anniversary of the preceding year’s annual meeting and, in the case of a special meeting called for the purpose of electing directors, between 90 and 120 days prior to the date of the special meeting or within 10 days after the day on which public announcement of the date of the special meeting is first made by us. In addition, our board of directors has the authority to amend or repeal our bylaws, or to adopt new bylaws, which could have the effect of delaying, deterring or preventing a change of control.

Certain other provisions of Nevada Law and our Articles of Incorporation, and Bylaws

Certain provisions of Nevada Law, our articles of incorporation and bylaws, which are summarized below, could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests.

Removal of Directors. Directors may be removed with or without cause by the holders of not less than two-thirds of the voting power of all of our then-outstanding stock entitled to vote generally in the election of directors (voting as a single class), excluding stock entitled to vote only upon the happening of a fact or event unless such fact or event shall have occurred.

Resolutions to Change Authorized Number of Directors. The authorized number of directors shall be fixed from time to time by resolution of the Board of Directors but shall not be less than three or more than 10.

Vacancies may be Filled by Directors. All vacancies, including newly created directorships, shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors and the director(s) so chosen shall hold office until their successors are elected and qualified, at which the term of the class to which he or she has been elected expires, or until his or her earlier resignation or removal.

Advance Notice Procedures. Stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance and timely notice in writing, and also specify requirements as to the form and content of a stockholder’s

4

notice.

No Cumulative Voting Rights. Our articles of incorporation and bylaws do not provide for cumulative voting rights. As a result, the holders of a majority of the shares of common stock entitled to vote in any election of directors would have the ability to elect all of the directors standing for election.

Action by Written Consent; Special Meetings of Stockholders. Stockholder action can only be taken at an annual or special meeting of stockholders called and noticed in the manner required by the bylaws. The stockholders may not in any circumstance take action by written consent.

Authorized but Unissued Shares. Our authorized but unissued shares of common stock will be available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock could render more difficult or discourage an attempt to obtain control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Transfer Online, Inc.

Listing

Our common stock is listed on the Nasdaq Capital Market under the symbol “SANW”.

5

EX-10.27

Exhibit 10.27

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement (this “First Amendment”) made and entered into as of the day of September 22, 2020, is by and among S&W Seed Company, a Nevada corporation (“S&W Seed”), Seed Holding, LLC, a Nevada limited liability company (“Seed Holding”), and Stevia California, LLC, a California limited liability company (“Stevia CA”; S&W Seed, Seed Holding and Stevia CA are each individually a “Borrower” and collectively referred to as “Borrowers”), the other Loan Parties hereto, the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”), and CIBC BANK USA (in its individual capacity, “CIBC”), as administrative agent for the Lenders (“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, prior hereto, Lenders provided loans, extensions of credit and other financial accommodations to Borrowers pursuant to (a) that certain Loan and Security Agreement dated as of December 26, 2019, by and among Lenders, Borrowers, the other Loan Parties thereto and Administrative Agent (the “Loan Agreement”), and (b) the other documents, agreements and instruments referenced in the Loan Agreement or executed and delivered pursuant thereto;

WHEREAS, Borrowers desire Administrative Agent and Lenders to, among other things, (a) modify certain financial covenants, (b) modify the definitions of Applicable Margin and Revolving Loan Availability, (c) decrease the Total Revolving Loan Commitment, (d) modify certain financial reporting requirements, (e) institute a LIBO floor, and (f) waive the “Existing Defaults” (as hereinafter defined) (collectively, the “Additional Financial Accommodations”); and

WHEREAS, Administrative Agent and Lenders are willing to provide the Additional Financial Accommodations, but solely on the terms and subject to the provisions set forth in this First Amendment and the other agreements, documents and instruments referenced herein or executed and delivered pursuant hereto.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises and understandings of the parties hereto set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Administrative Agent, Lenders, Borrowers and the other Loan Parties hereto hereby agree as set forth in this First Amendment.

I. Definitions.

A.Use of Defined Terms.  Except as expressly set forth in this First Amendment, all terms which have an initial capital letter where not required by the rules of grammar are used herein as defined in the LoanAgreement.

B.Amended Definitions. Effective as of the “First Amendment Effective Date” (as hereinafter defined), Section 1.1 of the Loan Agreement is hereby amended by substituting the definitions set forth below for the corresponding definitions set forth in the LoanAgreement:

Adjusted EBITDA shall mean, with respect to any Person and its Subsidiaries for any test period and without duplication, the sum of EBITDA, plus (a) to the extent deducted in determining EBITDA with respect to such Person and its Subsidiaries for such test period, (i) the Corteva/Pioneer Quarterly Addback, (ii) the Corteva/Pioneer One-Time Addback, (iii) one-time expenses incurred in connection with the initial documentation and closing of this Agreement in an amount not to exceed $500,000.00, provided such expenses are incurred not later than 30 days after the Closing Date, (iv) one-time expenses incurred in connection with Permitted Acquisitions in an amount not to exceed $500,000.00 for any Fiscal Year, provided such expensesareincurrednotlaterthan90daysaftertheclosingoftheapplicablePermitted

Acquisition, and (v) one-time expenses incurred in connection with the Related Transactions in an amount not to exceed $750,000.00, provided such expenses are incurred not later than 90 days after the closing of the Related Transactions, and (b) the New Equity Addback for such test period up to the amount of research and develop expenses incurred in such test period (and without duplication of the New Equity Addback utilized by Borrowers to decrease unfinanced Capital Expenditures in Sections 14.1 and 14.2). For purposes of calculating the Consolidated Fixed Charge Coverage Ratio and the Loan Party Fixed Charge Coverage Ratio only, the Loan Parties may include, without duplication, the following in Adjusted EBITDA: (i) half of the Five Points Sale Gain for the Fiscal Quarter ending March 31, 2021, (ii) one fourth (1/4) of the Five Points Sale Gain for the Fiscal Quarter ending June 30, 2021, and (iii) one fourth (1/4) of the Five Points Sale Gain for the Fiscal Quarter ending September 30,2021.

Applicable Margin shall mean, for any day, the margin set forth below, it being understood that the Applicable Margin for (i) LIBOR Loans shall be the percentage set forth under the column “LIBO Rate Applicable Margin”, (ii) Base Rate Loans shall be the percentage set forth under the column “Base Rate Applicable Margin”, (iii) the Unused Line Fee shall be the percentage set forth under the column “Unused Line Fee Applicable Margin”, and (iv) the Letter of Credit Fee shall be the percentage set forth under the column “Letter of Credit Fee Applicable Margin”:

LIBO Rate Applicable Margin	Base Rate Applicable Margin	Unused Line Fee Applicable Margin	Letter of Credit Fee Applicable Margin
3.00%	1.00%	0.375%	2.50%

Benchmark Replacement means the sum of: (a) the alternate benchmark rate (which may include Term SOFR) that has been selected by Administrative Agent giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then- prevailing market convention for determining a rate of interest as a replacement to the Libo Rate for U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark Replacement Adjustment provided that, if the Benchmark Replacement as so determined would be less than 1.0%, the Benchmark Replacement will be deemed to be 1.0% for the purposes of thisAgreement.

Eligible Inventory Sublimit shall mean $12,500,000.00 for Eligible Inventory with respect to alfalfa or sorghum seed stock, other than Pioneer alfalfa andsorghum.

LIBO Rate shall mean a rate of interest equal to (a) the per annum rate of interest at which United States dollar deposits for a period equal to the relevant Interest Period are offered in the London Interbank Eurodollar market at 11:00 A.M. (London time) two (2) Business Days prior to the commencement of such Interest Period (or three (3) Business Days prior to the commencement of such Interest Period if banks in London, England were not open and dealing in offshore United States dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other authoritative source selected by Administrative Agent in its sole discretion), divided by (b) a number determined by subtracting from 1.00 the then stated maximum reserve percentage for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D), or as the LIBO Rate is otherwise determined by Administrative Agent in its sole and absolute discretion; provided, that if at any time the LIBO Rate is below one percent (1.0%), the LIBO Rate shall be deemed to be one percent (1.0%). Administrative Agent’s determination of the LIBO Rate shall be conclusive, absent manifest error and shall remain fixed during such InterestPeriod.

Maximum Loan Amount shall mean Twenty-Five Million and No/100 Dollars

($25,000,000.00).

Revolving Loan Availability shall mean with respect to Borrowers an amount up to the sum of the following sublimits: (i) up to eighty-five percent (85.0%) of the face amount (less maximum discounts, credits and allowances which may be taken by or granted to Account Debtors in connection therewith in the ordinary course of Borrowers’ business) of Borrowers’ Eligible Accounts; provided that such advance rate shall be reduced by one (1) percentage point for each whole or partial percentage point by which Dilution (as determined by Administrative Agent in good faith based on the results of the most recent twelve (12) month period for which Administrative Agent has conducted a field audit of Borrowers) exceeds five percent (5%); plus (ii) up to ninety percent (90.0%) of the face amount (less maximum discounts, credits and allowances which may be taken by or granted to Account Debtors in connection therewith in the ordinary course of Borrowers’ business) of Borrowers’ Eligible Foreign Accounts; provided that Eligible Foreign Accounts backed by cash against documents shall not exceed $3,000,000; plus (iii) up to the lesser of (a) sixty-five percent (65.0%) (or such other percent determined by Lender in its Permitted discretion from time to time) of the lower of cost or market value of Borrowers’ Eligible Inventory, and (b) eighty-five percent (85.0%) of the appraised net orderly liquidation value (as determined by an appraiser acceptable to Administrative Agent) of Borrowers’ Eligible Inventory; provided that, the aggregate amount of Eligible Inventory consisting of sorghum and alfalfa (other than Pioneer sorghum and alfalfa) under clause (iii)(a) and (iii)(b) above which may be included in the calculation of Revolving Loan Availability shall not exceed the Eligible Inventory Sublimit; minus (iv) the Revolving Loan Reserve, (v) minus such other reserves as Administrative Agent elects, in its sole discretion, determined in good faith, to establish from time to time, including, without limitation, reserves with respect to Bank Products Obligations, Hedging Obligations and growers liens. Notwithstanding the foregoing, all Pioneer Inventory shall be considered ineligible from and after March 1,2021.

Revolving Loan Reserve shall mean an amount equal to Seven Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00) as of the First Amendment Effective Date, and such amount shall increase by Five Hundred Thousand and No/100 Dollars ($500,000.00) on the last day of each month beginning November 1, 2020 until the Revolving Loan Reserve reaches Ten Million and No/100 Dollars ($10,000,000.00); provided, however, (a) upon Administrative Agent’s receipt of the audited financial statements for the Fiscal Year ending June 30, 2021 in accordance with Section 9.3, and (b) so long as (i) no Event of Default then exists, (ii) the Consolidated Fixed Charge Coverage Ratio and Loan Party Fixed Charge Coverage Ratio, each calculated using Reserve Adjustment EBITDA, rather than Adjusted EBITDA, on a trailing twelve (12) month basis for such Fiscal Year is not less than 1.15 to 1.00, as reflected on such audited financial statements, and (iii) Borrowers have delivered to Administrative Agent a certification that all of the foregoing conditions precedent have been satisfied, including calculations of Consolidated Fixed Charge Coverage Ratio and Loan Party Fixed Charge Coverage Ratio calculated as set forth above, then this Revolving Loan Reserve shall be reduced to$0.00.

Total Revolving Loan Commitment shall mean an amount equal to Twenty-Five Million and No/100 Dollars ($25,000,000.00) except as such amount may be increased or, following the occurrence of an Event of Default, decreased by Required Lenders in their solediscretion.

C.New Definitions. Effective as of the date of this First Amendment, Section 1.1 of the Loan Agreement is hereby amended by adding the following new definitions thereto in the appropriate alphabetical order,respectively:

First Amendment Effective Date shall mean September, 2020.

Five Points Sale Gain shall mean the Borrowers net gain realized from the sale of the processing facility located at 25552 South Butte Avenue, Five Points, CA 93264 in an aggregate amount not to exceed $1,500,000.

PPP Loan means the unsecured loans received by S&W Seed through the Paycheck Protection Program pursuant to 15 U.S.C. 636(a)(36) guaranteed by the SBA totaling approximately $1,900,000 in the aggregate.

II.Amendments to Loan Agreement. Effective as of the First Amendment Effective Date, the Loan Agreement is hereby amended asfollows:

A.PPPLoan.Section12oftheLoanAgreementisherebyamendedbyaddingSection 12.13 to the Loan Agreement in proper numerical order as follows:

“12.13 PPP Loan. Borrowers have advised Administrative Agent and Lenders that S&W Seed obtained an unsecured PPP Loan from CIBC Bank guaranteed by the U.S. Small Business Administration (“SBA”). S&W Seed hereby represents, warrants, covenants and agrees that it has and will continue to use the proceeds thereof solely for the allowable uses set forth in Section 7(a)(36)(F) of the Small Business Act (15 U.S.C. 636(a)), as amended by the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) (the foregoing is referred to as the “PPP Loan Transaction”). Borrowers hereby represent, warrant covenant and agree to the following:

(a) S&W Seed shall use the proceeds of the PPP Loan solely for the allowable uses set forth in Section 7(a)(36)(F) of the Small Business Act (15 U.S.C. 636(a)), as amended by the CARES Act and shall comply in all other respects with the applicable requirements of the Small Business Act, the CARES Act and any and all promulgationsthereunder;

(b) at no time shall any liens on assets of any Borrower or any other Loan Party be granted to secure the PPP Loan without further written consent by Administrative Agent in its solediscretion;

(c) at no time shall any Loan Party guaranty the PPP Loan without further written consent by Administrative Agent in its solediscretion;

(d) prior to its receipt of PPP Loan proceeds, S&W Seed obtained consents from all holders of Subordinated Debt and/or any other lenders to S&W Seed in which the agreements with such holders and lenders thereunder prohibit or could be construed to prohibit the PPP Loan Transaction. Borrowers shall provide Lender with copies of all such consents, each in form and substance satisfactory to AdministrativeAgent;

(e) upon request by Administrative Agent, each Borrower shall promptly deliver to Administrative Agent true, correct and complete copies of any documentation executed in connection with the PPP LoanTransaction;

(f) all financial covenants, pricing provisions and any other agreements that exist between Borrowers, Administrative Agent and Lenders that would be affected by the PPP Loan Transaction (including, without limitation, any such covenant, provision or agreement that would vary based on the amount of debt outstanding or the effect of forgiveness of all or a portion of the PPP Loan) shall be calculated and interpreted as if the PPP Loan had not been incurred until Administrative Agent agrees otherwise or such covenants, provisions and other agreements have been amended in accordance herewith. Notwithstanding the foregoing, Administrative Agent, Lender and Borrowers hereby acknowledge and agree that (i) the PPP Loan shall be considered Debt for all purposes of the Loan Agreement upon the first to occur of (a) the SBA has made a final determination of the amount of the PPP Loan that is forgiven in accordance with the CARES Act, in which case the unforgiven portion of the PPP Loan shall be deemed Debt as of the date of such determination, or (b) March 31, 2021, in which case the unforgiven portion of the PPP Loan shall be deemed Debt as of such date, (ii) under no circumstances will the PPP Loan or the forgiveness of all or any portion of the PPPLoan

be deemed to increase Borrowers’ EBITDA under the Loan Agreement for any purposes, and (iii) S&W Seed has recorded the PPP Loan on its books as a government grant;and

(g) except as expressly amended by any other supplemental documents or instruments executed by Borrowers or Lender in order to effectuate the PPP Loan Transaction, the terms and conditions of the Loan Agreement and other Loan Documents shall remain unmodified and shall continue in full force andeffect.’

B.Debt. Section 13.2 of the Loan Agreement is hereby amended by deleting Section 13.2 in its entirety and substituting therefor thefollowing:

“13.2 Debt. No Loan Party nor any Subsidiary shall create, incur, assume or become obligated (directly or indirectly), for any Debt other than the Obligations, except that the Loan Parties and Subsidiaries may (i) incur Subordinated Debt; (ii) maintain their present Debt listed on Schedule 11.14 hereto; (iii) incur Contingent Liabilities arising with respect to customary indemnification obligations and earn out payments and with respect to Non-Loan Party Subsidiaries deferred consideration from the proceeds of Inventory and accounts receivable (subordinated to the Obligations in a manner satisfactory to Administrative Agent unless waived by Administrative Agent) in favor seller in connection with the Related Transactions or in connection with Permitted Acquisitions and purchases in connection with dispositions permitted under this Agreement; (iv) incur purchase money Debt or capitalized lease obligations in connection with Capital Expenditures permitted pursuant to Section 14.5 hereof incurred in connection with the purchase of Equipment; (v) incur Hedging Obligation approved by Administrative Agent and in favor of a Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation;(vi) solely with respect to the Loan Parties, incur operating lease obligations requiring payments not to exceed $2,000,000.00 in the aggregate during any Fiscal Year of the Loan Parties; (vii) make loans to, and guaranties of Debt of, one another so long as (X) each is a Loan Party, or (Y) with respect to Non-Loan Party Subsidiaries, the amount thereof does not exceed $250,000.00 in the aggregate; (viii) incur other unsecured Debt, in addition to the Debt listed above, in an aggregate principal amount not to exceed$250,000.00,

(ix) incur the Rooster Debt, so long as such Debt is subject to the Rooster Intercreditor Agreement, (x) upon consummation of the Related Transactions, incur the Debt as set forth on Annex 2, provided any such Debt is subject to the Related Transactions Subordination Agreement, (xi) maintain Debt pursuant to extensions, renewals and refinancing of the Debt set forth in clauses (i), (ii) and (iv) above so long as the principal amount of such Debt is not increased (and any terms with respect to clause (i) above are permitted by the applicable subordination agreement) and (xii) the PPP Loan.”

C.Financial Covenants. Section 14 of the Loan Agreement is hereby amended by deleting Section 14 in its entirety and substituting therefor thefollowing:

“SECTION14FINANCIAL COVENANTS.

Borrowers shall maintain and keep in full force and effect each of the financial covenants set forth below:

14.1 Consolidated Fixed ChargeCoverage.

Loan Parties shall not permit the Consolidated Fixed Charge Coverage Ratio, tested as of the last day of each Fiscal Quarter, to be less than 1.15 to 1.00 for any Fiscal Quarter from and after the Fiscal Quarter ending March 31, 2021. For purposes of clarification, the Consolidated Fixed Charge Coverage Ratio shall not be tested for the Fiscal Quarters ending September 30, 2020 and December 31, 2020.

14.2 Loan Party Fixed ChargeCoverage.

Loan Parties shall not permit the Loan Party Fixed Charge Coverage Ratio, tested as of the last day of each Fiscal Quarter, to be less than 1.15 to 1.00 for any Fiscal Quarter

from and after the Fiscal Quarter ending March 31, 2021. For purposes of clarification, the Loan Party Fixed Charge Coverage Ratio shall not be tested for the Fiscal Quarters ending September 30, 2020 and December 31, 2020.

14.3 Capital ExpenditureLimitations.

Loan Parties and their Subsidiaries shall not make any Capital Expenditures if, after giving effect to such Capital Expenditure, the aggregate cost of all Capital Expenditures would exceed $2,500,000.00 during any FiscalYear.

14.4 MinimumEBITDA.

Loan Parties shall not permit year-to-date EBITDA to be less than negative Six Million and No/100 Dollars (-$6,000,000.00), tested as of the last day of each Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2020, through and including December 31, 2020. For purposes of clarification, the minimum EBITDA covenant shall not be tested after December 31, 2020. Notwithstanding anything contained herein to the contrary, the Five Points Sale Gain shall not be included in the calculation of the minimum EBITDAcovenant.”

D.Annex 1. Annex 1 to the Loan Agreement is hereby deleted and replaced with Annex 1 attached to this FirstAmendment.

III.Conditions Precedent. Administrative Agent’s and Lenders’ obligations to provide the Additional Financial Accommodations to Borrowers are subject to the full and timely performance of the following covenants prior to or contemporaneously with the execution and delivery of this First Amendment:

A.Borrowers executing and delivering, or causing to be executed and delivered to the Administrative Agent and the Lenders, the following documents, each of which shall be in form and substance acceptable to the Administrative Agent and theLenders:

(i)a Note of even date herewith, payable by Borrowers to the order of CIBC in the original principal amount of $25,000,000.00;and

(ii)such other agreements, documents and instruments as Administrative Agent or Lenders may reasonablyrequest.

B.No Default or Event of Default exists under the Loan Agreement, as amended by this First Amendment, or any of the other Loan Documents, other than the ExistingDefaults;

C.No claims, litigation, arbitration proceedings or governmental proceedings not disclosed in writing to Administrative Agent and the Lenders prior to the date of hereof shall be pending or known to be threatened against Borrowers or any other Loan Party and no known material development not so disclosed shall have occurred in any claims, litigation, arbitration proceedings or governmental proceedings so disclosed which in the opinion of Administrative Agent is likely to materially or adversely affect the financial position or business of Borrowers or any other Loan Party or the capability of Borrowers to pay their obligations and liabilities to Lenders;and

D.There shall have been no Material Adverse Effect since the date of each Borrower’s most recent financial statements delivered to AdministrativeAgent.

IV.Organizational Information. Each Loan Party hereby represents and warrants to Administrative Agent and Lenders that as of the First Amendment Effective Date, (a) the formation and organizational documents of each such Loan Party attached to the Company General Certificates dated as of December 26, 2019, executed and delivered by each such Loan Party to Administrative Agent and Lenders (the “Certificates”), have not been modified or altered in any way, (b) the officers, members ormanagers,asapplicable,foreachLoanPartysetforthineachsuchCertificate,thatareauthorized

to execute documents on behalf of such Loan Party remain duly authorized officers, members or managers of such Loan Party, (c) the resolutions attached to each of such Certificate have not been modified, rescinded or altered in any way and are sufficient to authorize the execution and delivery of this First Amendment and the other agreements, documents and instruments executed and delivered in connection herewith, and (d) each Loan Party is and continues to be in good standing in the state of its formation and in all other states where it is qualified or licensed to do business in which the laws thereof require such Loan Party to be so qualified or licensed except where the failure to qualify would not have a material adverse effect.

V.Waiver of Existing Defaults. The Loan Parties each hereby acknowledge and agree asfollows: (a) the following Events of Default currently exist under the Loan Agreement (collectively, the “Existing Defaults”): (i) the Loan Parties failed to satisfy the Consolidated Fixed Charge Coverage Ratio for the Fiscal Quarter ending June 30, 2020, in violation of Section 14.1 of the Loan Agreement, and (ii) the Loan Parties failed to satisfy the Loan Party Fixed Charge Coverage Ratio for the Fiscal Quarter ending June 30, 2020, in violation of Section 14.2 of the Loan Agreement, and (b) as a result of such Events of Default, Administrative Agent and the Lenders have the right to immediately exercise such of their rights and remedies pursuant to the Loan Agreement and the other Loan Documents as they deem appropriate. Each Loan Party hereby represents and warrants to Administrative Agent and the Lenders that no Event of Default currently exists other than the Existing Defaults set forth above. Subject to the Loan Parties’ full and timely satisfaction of the conditions precedent set forth in this First Amendment, Administrative Agent and the Lenders hereby waive the Existing Defaults; provided that such waiver shall not be or be deemed to be a waiver of any other Event of Default, whether now existing or hereafter arising or occurring, including, without limitation, any future Event of Default arising under Section 14.1 and Section 14.2 of the Loan Agreement, other than the Existing Defaults for the time period set forthabove.

VI.Conflict. If, and to the extent, the terms and provisions of this First Amendment contradict or conflict with the terms and provisions of the Loan Agreement, the terms and provisions of this First Amendment shall govern and control; provided, however, to the extent the terms and provisions of this First Amendment do not contradict or conflict with the terms and provisions of the Loan Agreement, the Loan Agreement, as amended by this First Amendment, shall remain in and have its intended full force and effect, and Lenders, Administrative Agent and Borrowers hereby affirm, confirm and ratify thesame.

VII.Severability. Wherever possible, each provision of this First Amendment shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this First Amendment is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severed herefrom and such invalidity or unenforceability shall not affect any other provision of this First Amendment, the balance of which shall remain in and have its intended full force and effect. Provided, however, if such provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to be modified so as to be valid and enforceable to the maximum extent permitted by law.

VIII.Reaffirmation. Each Loan Party hereby reaffirms and remakes all of its respective representations, warranties, covenants, duties, obligations and liabilities contained in the Loan Agreement, as amended hereby, and the other LoanDocuments.

IX. Fees, Costs andExpenses.

A.Contemporaneously herewith, Borrowers shall pay Lender a fully earned, non- refundable amendment fee in the amount of Twenty-Five Thousand and No/100 Dollars($25,000.00).

B.Borrowers agree to pay, upon demand, all fees, costs and expenses of Administrative Agent and Lenders, including, but not limited to, reasonable attorneys’ fees, in connection with the preparation, execution, delivery and administration of this First Amendment and the other agreements, documents and instruments executed and delivered in connection herewith or pursuanthereto.

X. ReservationofRights.ExceptwithrespecttotheExistingDefaults,AdministrativeAgentand

Lenders reserve all of their rights and remedies, including all security interests, assignments and liens pursuant to the Loan Agreement and the other Loan Documents, as well as any rights and remedies at law, in equity or otherwise. Except with respect to the Existing Defaults, nothing contained in thisFirst Amendment shall be or be deemed a waiver of any presently existing or any hereafter arising or occurring breach, default or event of default, nor shall preclude the subsequent exercise of any of Administrative Agent’s or Lenders’ rights orremedies.

XI.Choice of Law. This First Amendment has been delivered and accepted in Chicago, Illinois, and shall be governed by and construed in accordance with the laws of the State of Illinois, regardless of the laws that might otherwise govern under applicable principles of conflicts of law as to all matters, including matters of validity, construction, effect, performance andremedies.

XII.Counterpart. This First Amendment may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. A facsimile or email transmitted executed counterpart to this First Amendment and the other agreements, documents and instruments executed in connection herewith will be deemed an acceptable original for purposes of consummating this First Amendment and such other agreements, documents and instruments; provided, however, each Borrower and each other Loan Party shall be required to deliver to the Administrative Agent original executed signature pages in substitution for said facsimile or email transmitted signature pages upon the Administrative Agent’s requesttherefor.

XIII.Waiver of Jury Trial.EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THE LOAN AGREEMENT, AS AMENDED FROM TIME TO TIME, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY OTHER AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE AJURY.

[signature page follows]

IN WITNESS WHEREOF, Administrative Agent, Lenders, Borrowers and each other Loan Party have caused this First Amendment to be executed and delivered by their duly authorized officers as of the date first set forth above.

BORROWERS:

S&W SEED COMPANY, a Nevada corporation By/s/ Matthew K. Szot Matthew K. Szot, Executive Vice President and Chief FinancialOfficer	SEED HOLDING, LLC, a Nevada limited liability company By /s/ Matthew K. Szot Matthew K. Szot,Manager
STEVIA CALIFORNIA, LLC, a California limited liability company By/s Matthew K. Szot Matthew K. Szot,Manager

[Signature page to First Amendment to Loan and Security Agreement]

CIBC BANK USA,

as Administrative Agent and as a Lender

By: /s/ Jennifer Kempton
Name: JenniferKempton

Title: Managing Director

[Signature page to First Amendment to Loan and Security Agreement]

ANNEX 1 – COMMITMENTS

Lender	Revolving Loan Commitment	Percentage
CIBC BANK USA	$25,000,000.00	100.000000000
Total	$25,000,000.00	100.000000000

EX-10.29

Exhibit 10.29

Date: 17/02/2020

BUSINESS LETTER OF OFFER

National Australia Bank Limited

and

S&W Seed Company Australia Pty ltd CAN/ARBN/ABN 061 114 814

“you”

Your Business Lending Facilities with NAB and why this matters The aggregate of our business finance credit exposures to you and your related (business) entities is used to determine if you are a Small Business. The Banking Code applies to our relationship with you if you are a small business as defined in the Banking Code. However, we will also treat you as a Small Business, and therefore apply the Banking Code, when the total of our business finance credit exposures to you and your related (business) entities is less than $5,000,000. The total sum of credit exposures in this Agreement and in your other business facilities listed below is $25,404,189.96. We may also have other business finance credit exposures to your related (business) entities under separate agreements. These need to be taken into account to determine whether you are a Small Business for the purposes of this Agreement.
Facility Type	Limit
REVOLVING LEASING LIMIT	$2,000,000.00
TRADE FINANCE	$16,000,000.00
HIRE PURCHASE/EQUIPMENT LOAN	$204,189.96
NAB BUSINESS MARKETS LOAN	$5,000,000.00
FARMERS CHOICE FARM MANAGEMENT OVERDRAFT	$2,000,000.00
COMMERCIAL CARD	$200,000.00

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 1

YOUR NAB BUSINESS FACILITY AT A GLANCE

Farmer’s Choice Package The Farmer’s Choice Package Specific Conditions apply to this Facility.
Package Details
Maximum Aggregate Borrowing Limit (“MABL”):	$5,000,000.00
Package Expiry Date:	31/03/2035
Review Periods:	31/03/2020
Transaction Account Number:	85-772-6783
MABL Reduction Option:	Option 1 – Interest Only Option
Farmer’s Choice Package Fee:	$ 800.00. This is payable by you and debited to your transaction account (or any account you have with us) on a yearly basis.
Application Fee:	$ 0.00 payable by you on your acceptance of this Agreement. This will be debited to your transaction account (or any account you have with us).
Products Included in Farmer’s Choice Package:	Facility Type:NAB Business Markets Loan Facility Amount:$5,000,000.00 Account Number:73-333-4200 Facility Type:Farmers Choke Farm Management Account Overdraft Facility Amount:$2,000,000.00 Account Number:85-772-6783

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 2

Farm Management Account Overdraft The NAB Overdraft Facility Specific Conditions apply to this Facility.
Key aspects of the Facility include the following: •The Facility is fluctuating in nature and is linked to your transaction account. It will regularly fluctuate between debit and credit balances. To help ensure this takes place we may require that all, or an agreed part, of your gross business income is credited to your linked transaction account. •Interest payments on this Facility will be charged monthly. •The Facility Amount Owing under the Facility is repayable on demand at any time, but we will give you at least 90 days’ notice before you must pay. See the Specific Conditions for more information. •We can also cancel the Facility Limit at any time, but we will give you at least 90 days’ notice before this takes effect. •We may give you a shorter notice period than that described in the preceding two bullet points or no notice period if a Default has occurred and we are entitled to take Enforcement Action. See the Business Lending General Terms for more information. These aspects are essential elements of the Facility and allow us to, amongst other things, manage the risk and cost of providing this Facility.
Facility Details
The purpose of your Facility	Working Capital
Facility Limit:	$2,000,000.00
Facility Expiry Date:	The Facility has a revolving term and is subject to annual review.
Account Number:	85-772-6783
Variable Interest Rate whilst part of the Farer’s choice Package:	5.9700% per annum (indicative) This is comprised of the Farmer’s Choice Prime Indicator Rate plus a Customer Margin (rates are subject to change) Farmer’s Choice Prime Indicator Rate: 5.9700% per annum (indicative). Customer Margin 0.0000% per annum. This is a customer risk margin determined through our assessment of your financial situation. 6.9700% per annum (indicative) This is comprised of the Business Overdraft Prime Indicator Rate plus a Customer Margin (rates are subject to change). Business Overdraft Prime Indicator Rate: 6.9700% per annum (indicative).
Interest Rate whilst not part of the Farmer’s Choice Package:	Customer Margin: 0.0000% per annum. This is a customer risk margin determined through our assessment of your financial situation.
Annual Facility Fee:	$ 0.00 payable annually. This will be debited to your transaction account during February every year.
Application Fee:	$ 0.00 payable by you on your acceptance of this Agreement. This will be deleted to our transaction account.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 3

Default Interest Rate	Base Indicator Rate (available on nab.com.au) plus Customer Margin plus a Default Margin of 1.00% per annum. This is the rate that is applied to overdue or overdrawn amounts, or if you exceed your Facility Limit. For more details refer to your Business Lending General Terms.
Other Important Facility Information
Facility Specific Security:	Not applicable
Additional Facility Specific Conditions:	Farmer’s Choice Package Specific Conditions apply.

Trade Refinance Facility The Global Trade Finance Specific Conditions apply to this Facility.
Facility Details
The purpose of your Facility:	Working Capital
Facility Limit:	$16,000,000.00
Your Nominated Account at NAB:	To be advised Your Nominated Account will be debited with all fees and charges payable under this Facility unless you make separate arrangements with us.
Facility Expiry Date:	31/03/2022
Term of Drawings:	30 days. You can propose the term of each utilisation which may be for a period of up to 30 days (or any other period that we permit at our discretion), provided that the term is consistent with your trading terms.
Interest Rate (Australian Dollar):	The interest rate for a drawing denominated in Australian Dollars is fixed at the time of that drawing and will be our Australian Trade Refinance (ATR) Rate quoted by us at the time of drawing plus a Customer Margin.
Payment of interest:	Payable in arrears.
ATR Indicator Rate:	2.7100% per annum currently.
Customer Margin:	1.5000% per annum. This is a customer risk margin determined through our assessment of your financial situation.
Facility Fee:	1.0000% per annum of the Facility Limit calculated on a 365 day basis payable in advance. The first such fee will be payable on a pro-rata basis, on the date of this Agreement, with subsequent fees being payable in full on the last Business Day of each quarter and upon cancellation of the Facility.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 4

Application Fee:	$10,500.00 payable by you on your acceptance of this Agreement.
Trade and Invoice Finance Transaction Fees:	Our standard fees and charges as detailed in our booklet: Business Banking Fees - A Guide to Fees and Charges in connection with this Facility will apply to all transactions under this Facility. Non-standard fees and charges will be advised to you.
Default Interest Rate (Foreign Currency):	The default interest rate for a drawing denominated in a foreign currency is fixed at the time of that drawing and will be calculated as the Interest rate (Foreign Currency) plus a Default Margin of 1.00% per annum.
Default Interest Rate (Australian Dollar):	5.2100% per annum currently. The default interest rate for a drawing denominated in Australian Dollars is fixed at the time of that drawing and will be calculated as the Interest Rate (Australian Dollar) plus a Default Margin of 1.00% per annum.
Other Important Facility Information
Facility Specific Security:	Not Applicable

NAB Business Markets Loan The NAB Business Markets Loan Specific Conditions apply to this Facility.
Facility Details
The purpose of your Facility:	Construction of Non-Residential Buildings – Industrial
Facility Limit:	$5,000,000.00
Account Number:	73-333-4200
When your Facility starts:	14/02/2020
Last Date for Drawdown:	14/05/2020
Facility Expiry Date:	31/03/2022
Pricing Period – when your interest rate will be charged and replaced:	1 month. You can choose when your interest rate will be charged and repriced. It may be every 1, 2, 3 or 6 months or any other time that we agree with you. Interest payments will be charged at the end of each Pricing Period.
Floating Rate:	5.3760 % per annum (indicative). The Floating Rate is the Business Lending Rate plus the Customer Margin.
Business Lending Rate:	2.7760% per annum (indicative). The actual Business Lending Rate for a Pricing Period will be the relevant Business Lending Rate applicable at the start of that

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 5

	Pricing Period.
Customer Margin:	2.6000% per annum. This is a customer risk margin determined through our assessment of your financial situation.
Your Principal Repayments:	Payment date & frequency: $500,000.00 per year commencing on 30/11/2020 or the following year after the settlement or drawdown of the facility, whichever occurs later. Subsequent payments are then payable in accordance with the payment date and frequency above. The Facility is repayable in full on the Final Repayment Date.
Application Fee:	$13,600.00 payable by you on your acceptance of this Agreement.
Service Fee:	$ 0.00 payable in arrears on the last Business Day of each month.
CapRate Premium:	As detailed within the Drawdown Schedule. This is not ascertainable at the time of application. This is payable by you when you are notified of the Cap Rate Premium in the Drawdown Schedule. However, if the Facility terminates before all instalments are paid, then you must pay us the full amount of the Cap Rate Premium less any instalments paid before such termination.
Default Interest Rate:	This is comprised of the Base Indicator Rate (available on nab.com.au) plus Customer Margin plus Default Margin of 1.00% per annum. This is the rate that is applied to overdue or overdrawn amounts, or if you exceed your Facility Limit. For more details refer to your Business Lending General Terms.
Your Nominated Account at NAB:	To be advised Your Nominated Account will be debited with all fees and charges payable under this Facility unless you make separate arrangements with us.
Other Important Facility Information
Economic Cost:	You may be required to pay Economic Costs if a Fixed Rate component or a Flexible Maturity Fixed Rate component is terminated early for any reason. For more information, see the Business Lending General Terms.
Facility Specific Security:	Not Applicable.
Additional Facility Specific Conditions:	Farmer’s Choice Package Specific Conditions apply.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 6

Here’s what we promise to do

Always act fairly and reasonably keeping in mind your and our respective business interests.

Doing the right thing is important to us. That’s why we’ve adopted the Banking Code, which sets the standards of practice and service for banks.

We commit to the term of the Facility which we have negotiated with you in this Agreement.

We commit to notifying you of any changes we make to this Agreement.

We commit to allowing you to terminate this Agreement at any time. We won’t charge you an exit fee but some facilities may have costs to unwind your funding arrangements or may require you to give us prior notice.

We commit to giving you any information you require to better understand this Agreement or your Facility with us.

We have laws in Australia to protect small businesses from unfair contract terms. NAB is committed to this contract being fair.

Promises we rely on

•It’s important that you meet the obligations in the additional covenants and undertakings detailed below at all times during this Agreement. Please contact us if you’re worried about not meeting these so we can provide early assistance.

•If there are any inconsistencies between these additional covenants and undertakings and the Business Lending General Terms or Facility Specific Conditions, these additional covenants and undertakings prevail to the extent of the inconsistency.

•These additional covenants and undertakings are to be assessed and reported as detailed below.

•Stock harvest ed in prior calendar year is to be excluded from Borrowing Base Facility approved inventory from 31 December of the calendar year following harvest.

•Borrowing Base Facility agreed Inventory ‘Selling Price ‘ for stock value calculation is to be confirmed at annual review by the Bank by 31 March each year.

•Minimum capital adequacy of 30.00% as measured on a daily basis and reported in relation to the 12-month period ending on 31st December annually for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd. To be reported on by the 15th February annually via the December quarterly management reports. Capital adequacy being tangible net worth + Intercompany loans from S&W divided by total tangible assets.

•Within 45 days of the close of each quarter a Statutory Payment Certificate to be completed by you and signed by one or two of your directors or authorised representatives as appropriate, detailing as at the end of the reporting period that statutory payments are current for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Within 45 days of the close of each quarter, a copy of the quarterly actual to projected cash flow

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 7

reports to be provided with commentary on all variances greater than 10% for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Within 155 days of the close of each financial year, a copy of the unaudited annual report or balance sheet, profit & loss account for the ensuing year for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Within 45 days of the close of each quarter, a copy of your quarterly management accounts including balance sheet, profit & loss account, and cash flow statement for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Minimum interest cover of 1.25 times (Earnings Before Interest, Tax Depreciation and Amortisation (EBITDA) / Total Interest Expense) as measured for the 12 month period ending on 30th June annually for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd special purpose management report

Your assets / premises to be used as security for the Facility

•The Securities listed below secure all new Facilities in this Agreement.

•In the future, you may agree in writing to further securities being provided.

•If you have any earlier Securities in place with NAB, these will remain in place and will not be detrimentally affected by these new Securities.

Description

Security Interest and Charge over all of the present and future rights, property and undertaking of S&W Seed Company Australia Pty Ltd ACN 061 114 814.

Registered Mortgage over property situated at 4 & 5 Stirling Road Keith SA more particularly described in Certificates of Title Register Book Volume 6186 Folios 122 and 123.

Guarantee and Indemnity for $15,000,000.00 given by S & W Seed Company.

Guarantee and Indemnity for $23,000,000.00 given by Pasture Genetics Pty Ltd ACN 074 290 252 supported by:

Security Interest and Charge over all of the present and future rights, property and undertaking of Pasture Genetics Pty Ltd ACN 074 290 252.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 8

GENERAL FEES AND CHARGES

Our estimate of your upfront fees and charges

We want to be transparent about your fees and charges, so you’re clear about what you’re paying. There are a number of fees you need to pay as soon as you sign this Agreement. These are set out below. For more information, read the enclosed document: Business Banking Fees: A Guide to Fees and Charges.

NB: This is only an estimate. There may be extra fees and charges for your Facility. If this is the case, we’ll let you know as soon as possible.

Estimate of NAB’s credit fees and chargesApplication fee24,100.00This application fee is the total application fee payable under this Agreement. It includes any separate facility application fees set out in the Facility Details.Company search fee$ 80.00Estimate of total amount of NAB’s credit fees and charges24,180.00 Estimate of non-NAB fees and charges(payable to the relevant government department and payable to third parties)Title Search fee$ 60.50Estimate of total amount of non-NAB fees and charges$60.50 Estimate of total amount of all fees and charges (as far as can be ascertained now).$ 24,240.50

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 9

Here are some important things you should know This is a summary of some important things you should know. Please read through the Business Lending General Terms for the full terms.
Who to contact if things go wrong?	You agree to tell us straight away about any changes to your business or other events which may impact on your ability to meet your obligations to us. If you’re experiencing financial hardship you can contact your banker or you can call NAB Assist on 1300 135 323 or Customer Care Small Business on 1300 961 577.
When will a Default occur?	Payment Default:	You will be in Default if you do not pay on time any amount due.
	Defaults due to Adverse Events:	Even if payments are made on time, you will also be in Default if specific other events occur, including •you are Insolvent •a Guarantor is Insolvent •you or a Guarantor have not complied with the law, lose capacity or give us misleading information •creditor enforcement occurs •use of facility for an unapproved purpose •unauthorised sale or disposal of assets that form part of the Security •change of control (not applicable if you are an individual) •loss of licence, permit or other authorisation •failure to maintain insurance •any event specified as an “Adverse Event” in your Business Letter of Offer (Not all Adverse Events will lead to enforcement — see the Business Lending General Terms for more information)
When can NAB enforce?	Usually we will give you notice of a Default and an opportunity to remedy it. But sometimes we can enforce immediately when there is a Default, including when urgent action is needed to protect or take control of assets that form part of the Security — see the Business Lending General Terms for more information.
Can NAB increase costs?	•From time to time we may increase costs payable by you. For example we may introduce a new fee, charge or premium for services we provide to you. •Also, if the law or other rules applying to us as a bank change we may need to increase costs payable by you; •We will give you at least 30 days’ notice of any increased cost. If you’re not happy with the increased cost you can repay us and exit this Agreement. •See the Business Lending General Terms for full details about when we might increase our costs and how to exit if you’re not happy.
How can NAB change the terms of the Agreement?	We promise to act reasonably when we make any changes. Types of changes we can make include: •Introducing a new fee, charge or premium or changing the amount of a fee or way it’s calculated. •changing an interest rate (other than a fixed rate); •Changing a term of this Agreement to comply with relevant laws, industry code or our prudential obligations; and •Changing your repayment obligations. We will notify you of changes we make by either writing to you or putting an advertisement in national or local media.
What you can do if you don’t like a change?	If you’re not happy with a change we’ve made or are going to make you can repay us and exit this Agreement. Economic Costs may be payable if you exit early (but we won’t charge you an exit fee).See the Business Lending General Terms for full details about changes we can make and how to exit if you’re not happy.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 10

FACILITY ACCEPTANCE

The laws of South australia apply when interpreting this Agreement.

Your Acceptance Of Our Offer

I/we accept NAB’s offer as set out in this Agreement.

Further, I/we:

1.declare that all the information I/we have given NAB is accurate and not misleading

2.acknowledge that I/we have read the Bank Documents, including this Agreement, the relevant Specific Conditions to this Facility and the Business Lending General Terms

3.acknowledge that the assets I/we (or a Security Provider) have put up as security for this Facility will be at risk if I/we do not repay our Facility or otherwise Default; and

4.understand that NAB may pay a commission to a third party where I/we have been introduced to NAB by that third party.

Declaration of purpose

I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for:

•business purposes; or

•investment purpose other than investment in residential property.

IMPORTANTYou should only sign this declaration if this loan is wholly or predominantly for:•business purposes; or•investment purposes other than investment in residential property.By signing this declaration you may lose your protection under the National Credit Code.

Each party may sign a separate copy of this document. Each signed copy is an original of this document and all copies together will constitute one agreement.

Executed by the customer

S&W Seed Company Australia Pty Ltd CAN 061 114 814

Customer Company Name (BLOCK LETTERS)

Executed by the company named above in accordance with Section 127 of the Corporations Act 2001 (Cwlth)

/s/ Andrew Ross Carthew	/s/ Dennis Jury
Signature	Signature
Andrew Ross Carthew	Dennis Jury
Full name (BLOCK LETTERS)	Full name (BLOCK LETTERS)
Director / Secretary*	Director
Office Held	Office Held
18/2/20
Date	Date

* Please tick here if you are signing as Sole Director and Sole Company Secretary

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 11

SPECIFIC CONDITIONS TO YOUR FACILITY

NAB Overdraft Facility

1.HOW THIS FACILITY WORKS

We want to support your business.

The Facility is designed to meet your transactional banking and working capital requirements through one simple facility. It can be used and repaid from time to time within the approved limit.

2.GETTING STARTED

Before we get started and you can use this Facility:

•we will need everything set out in clause 3 of the Business Lending General Terms; and

•you will need to nominate or set up and maintain a linked bank account with us in your name. This will be your transaction account for this Facility. The “NAB Business Products Terms and Conditions” also govern use of that account.

A Drawdown Notice is not required to use this Facility.

3.FACILITY LIMIT

(a)You can borrow and repay under this Facility multiple times, so long as the debit balance of your account doesn’t exceed the Facility Limit. If:

(i)the debit balance of the account exceeds the Facility Limit, you must pay us the excess immediately. Until you do (and subject to paragraph (ii) immediately below), you must pay default interest calculated at the end of each day on the excess amount at the Default Interest Rate divided by 365; or

(ii)the Facility Amount Owing remains unpaid after the Final Repayment Date, you must pay default interest calculated at the end of each day on the Facility Amount Owing at the default rate applicable to the transaction account under its NAB Business Products Terms and Conditions divided by 365.

(b)Please note that:

(i)either we or you can decide to cancel the Facility Limit at any time by written notice. If we do so, we will give you at least go days’ notice before this takes effect, however we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(ii)you can decide to reduce the Facility Limit at any time by written notice.

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4.REPAYMENT

We can require you to repay the Facility Amount Owing under this Facility at any time, but will give you at least go days’ notice before you must pay except that:

(a)we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(b)on the Final Repayment Date (and without us either giving you notice or making a demand on you), you must pay the Facility Amount Owing.

5.INTEREST

Interest is calculated at the end of each day on the debit balance of your account by applying the daily interest rate, which is the relevant yearly interest rate divided by 365. The interest rate is set out in your Facility Details and comprises an indicator rate and Customer Margin specified in the Facility Details.

If your Facility Details state that an interest rate is “indicative”, you can find out what the actual interest rate is at any time by visiting the “Business” tab on nab.com.au and search “Rates Fees and Charges” to find the relevant indicator rate or you can contact us for information about current rates. The full method of calculation of your interest rate(s) is set out in the Facility Details.

If your Facility Details specify tiered interest rates, then the interest is charged on each part of the debit balance of your account within each tier amount, at the interest rate for that tier set out in your Facility Details.

You must pay:

(a)accrued interest charges on the last Business Day of each month (excluding interest charges for that day, which are included in the amount payable in the following month); and

(b)all accrued but unpaid interest on the Final Repayment Date.

6.PAYMENT OF YOUR INCOME

If we require, you must ensure that all, or an agreed part, of your gross business income is paid directly into your Nominated Account.

7.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in these Specific Conditions with a specific meaning are either explained in the Facility Details or in the Business Lending General Terms.

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Farmer’s Choice Package

1.HOW THE FARMER’S CHOICE PACKAGE WORKS

We want to support your business.

The Farmer’s Choice Package gives the following concessions and benefits for all of the Facilities and accounts which remain part of the package until the Package Expiry Date specified in the Package Details.

(a)One all-up Application Fee applies for all Facilities within the package based on the total sum of all Facility Limits. If the total sum of the Facility Limits increases, an Application Fee may be charged on any increase.

(b)No Service Fees apply for a Business Options Facility, Overdraft Facility, NAB Business Market Loan or Market Rate Facility (or any other Facility in the package that we notify). The Facility Details for each Facility specifies any Undrawn Fee and other fees that apply.

(c)A preferential Variable Interest Rate applies for a Farm Management Account Overdraft Facility- this is set out in the Facility Details.

The concessions and benefits immediately cease to apply on the Package Expiry Date or on any earlier cancellation of the package.

The Facilities in the package are initially listed in the Package Details, or as agreed with us from time to time. You will still need to comply with the Facility Details and Specific Conditions for each Facility (to the extent they are not inconsistent with the Package Details and these Specific Conditions).

The Package Details will specify if your package includes Facilities available to persons other than you. In that case you agree that we may disclose to those other persons information about any Facility in the package (or an associated account) as we consider necessary to administer your package, even if a Facility or account is in your name alone.

2.GETTING STARTED

Before you can access the concessions and benefits for the Facilities in the package, you will need to:

•pay the first annual Farmer’s Choice Package Fee specified in the Package Details; and

•nominate or set up and maintain a linked bank account with us in your name. This will be your transaction account for the package arrangement. The NAB Business Products Terms and Conditions also govern use of that account.

3.MAXIMUM AGGREGATE BORROWING LIMIT (MABL)

The Package De tails specify the MABL that applies as a total limit across all package Facilities (other than an Overdraft Facility). The “MABL Reduction Option” in the Package Details says how your MABL reduces over time.

You must not exceed the MABL, including as the MABL reduces over time. Regardless of what the Specific Conditions and Facility Details for a package Facility say:

•you can’t use a package Facility (other than an Overdraft Facility) if this would cause the MABL to be exceeded; and

•you must make repayments under the package Facilities (other than an Overdraft Facility) to keep within the MABL.

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We may, after consulting with you, agree to change your MABL Reduction Option. The object of any change would be to better reflect or address your changed circumstances or requirements.

The MABL will reduce to zero on the Package Expiry Date or any earlier cancellation of the package.

4.CHANGES TO THE PACKAGE

(a)You may ask us to add or remove Facilities which form part of the package, to increase the Facility Limit of any Facility included in the package, to increase your MABL, or to extend the Package Expiry Date. We will let you know if we agree to any such request, and any conditions we require to agree a request. You may need to enter into a document with us to set out the terms of any changes to your package.

(b)We will notify you when any Facilities are to be added to, or removed from, the package. We may remove a Facility without your consent but we will give you reasonable notice before we do so in accordance with the Business Lending General Terms.

(c)If Facilities are added which are available to persons other than you, we may disclose to those other persons information about any Facility in the package (or an associated account) as we consider necessary to administer your package, even if a Facility or account is in your name alone.

5.CANCELLATION OF THE PACKAGE

(a)If you are in Default and we become entitled to take Enforcement Action, in addition to any other rights we may have under the Business Lending General Terms, we may immediately;

(i)cancel the package by written notice to you; and

(ii)suspend your ability to further use any package Facility until the Default is rectified to our satisfaction.

(b)If you are not a Small Business and any Facilities in your package are available to persons other than you, and any of those other persons are in default (however described) under any agreement we have with them relating to a package Facility, we may cancel the package by written notice to you and those other persons.

(c)You may cancel the package at any time by giving us at least 2 Business Days prior written notice. If any Facilities in your package are available to persons other than you, you can only cancel the package if the cancellation notice is given by you and those other persons.

6.FEES

(a)If not already paid, you must pay us the Application Fee when required under the Package Details.

(b)You must pay us the Farmer’s Choice Package Fee annually during the package t erm. The first Farmer’s Choice Package Fee is due on the day you enter into the package (or at our discretion, on the last Business Day of the month in which you enter into the package). Each subsequent Farmer’s Choice Package Fee is due on each anniversary of that date during the package term.

(c)You irrevocably authorise us to debit the Application Fee and each annual Farmer’s Choice Package Fee to any account you have with us.

7.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in these Specific Conditions with a specific meaning are either explained in the Package Detail s, the Facility Details of a Facility, the Business Lending General Terms or below.

Package Details means the details for the Farmer’s Choice Package in your Business Letter of Offer.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 4

Global Trade Finance

HOW THESE FACILITIES WORK

We want to support your business.

Global Trade Finance comprises different types of Facilities which could include:

•a Foreign Currency Overdraft Facility

•a Documentary Letter of Credit Facility

•a Documentary Letter of Credit and/or Documents Surrendered Facility

•a Standby Letter of Credit Facility

•a Trade Refinance Facility, or

•an Overseas Bills Purchased Facility.

The Facility Details of the particular Facilities available to you are set out in your Business Letter of Offer. Facility Limits are set in Australian Dollars unless your Facility Details say otherwise.

These Specific Conditions cover all of the Facilities listed above, so you should read the relevant conditions applicable to your Facilities as follows:

•Clause 1 (Getting Started) — This applies for every type of Global Trade Finance Facility.

•Clause 2 (Foreign Currency Overdraft Facilities) — This applies only to a Foreign Currency Overdraft Facility.

•Clause 3 (Letter of Credit Facilities) — This applies only to a Documentary Letter of Credit Facility, Documentary Letter of Credit and/or Documents Surrendered Facility, or Standby Letter of Credit Facility.

•Clause 4 (Trade Refinance Facility or Overseas Bills Purchased Facility) — This applies only to a Trade Refinance Facility, or Overseas Bills Purchased Facility.

•Clauses 5 to 8 (General) — These apply for every type of Global Trade Finance Facility, except where specified otherwise.

Except for the Foreign Currency Overdraft Facility, the Global Trade finance Facilities are generally not repayable upon demand except on the Final Repayment Date or when a Default has occurred and we are entitled to take Enforcement Action.

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FOREIGN CURRENCY WARNING NOTICE•This important notice should be read and understood before you decide to enter into a Facility or transaction in a foreign currency.•This notice is intended to provide you with a general warning of the risks that can arise from adverse exchange rate movements when transacting in a foreign currency, and to advise you that other risks also exist.•Your liability in Australian Dollars will increase, possibly very substantially, if there is an adverse movement in either:(a)the Australian Dollar relative to the currency of the foreign currency facility or transaction; or(b)the foreign currency relative to the Australian Dollar.•Another risk that may also exist is the potential for adverse movements in the interest rate that applies to the foreign currency facility or transaction.•You should also be aware that in some circumstances mechanisms may be available for limiting these risks. Such mechanisms may include products ranging from forward FX contracts (FEC’s) and fixed rate loans to more complex options and derivatives. A solution can be tailored to your specific business needs.•For more information about managing risks associated with international trade, go to the “Business” tab on our website www.nab.com.au and click on > International and Foreign Exchange. For more information regarding Foreign Exchange Risk please telephone a NAB Business Markets Specialist on 1800 307 827 (7am — 7pm EST).You should seek independent professional advice before entering into a Facility or transaction in a foreign currency. In particular, advice should be sought as to the suitability of a foreign currency facility or transaction for your purposes and risk management strategies available for such facilities or transactions.

1.GETTING STARTED

Before we get started and you can use any Global Trade Finance Facility:

•we will need everything set out in clause 3 of the Business Lending General Terms; and

•you will need to nominate or set up and maintain a linked bank account with us in your name. This will be your Nominated Account for transactions under the relevant Facility as specified in the Facility Details. The NAB Foreign Currency Account — Onshore Terms and Conditions govern use of that account in relation to a Foreign Currency Overdraft Facility and otherwise the NAB Business Products Terms and Conditions govern the use of that account. For a Foreign Currency Overdraft Facility, you don’t need a separate linked foreign currency bank account. We will keep a record of transactions relating to the Facility in the relevant currency.

2.FOREIGN CURRENCY OVERDRAFT FACILITIES

2.1Specific requirements to use a Foreign Currency Overdraft Facility

Please refer to clause 4 of the Business Lending General Terms which set out the basic requirements for each use of a Facility except a Drawdown Notice is not required. In addition, before you can use a Foreign Currency Overdraft Facility, we need to be satisfied that (unless we agree otherwise):

(a)the currency of use is one we approved for the Facility; and

(b)the requested use amount, when notionally converted to the relevant currency of the Facility (as we determine at our prevailing spot rate of exchange) would not cause the Facility Limit to be exceeded.

2.2Facility Limit

(a)You can borrow and repay under the Foreign Currency Overdraft Facility multiple times, so long as the debit balance of your account doesn’t exceed the Facility Limit. If:

(i)the debit balance of the account exceeds the Facility Limit, you must pay us the excess immediately. Until you do (and subject to paragraph (ii) immediately below), you must pay default interest calculated at the end of each day on the excess amount at the Default Interest Rate divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms); or

(ii)the Facility Amount Owing remains unpaid after the Final Repayment Date, you must pay default interest calculated at the end of each day on the Facility Amount Owing at the default rate applicable to the transaction account under its NAB Business Products Terms and Conditions divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms).

(b)Please note that:

(i)either we or you can decide to cancel the Facility Limit at any time by written notice. If we do so, we will give you at least go days’ notice before this takes effect, however we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(ii)you can decide to reduce the Facility Limit at any time by written notice.

2.3Repayment

We can require you to repay all or part of the Facility Amount Owing at any time, but we will give you at least go days’ notice before you must pay, except that:

(a)we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(b)on the Final Repayment Date (and without us either giving you notice or making a demand on you), you must pay the Facility Amount Owing.

2.4Prepayment

You may prepay the whole or any part of the Facility Amount Owing at any time.

2.5Interest

(a)The interest rate is the Debit Balance – Base Interest Rate for the relevant foreign currency payable in relation to debit balances on Foreign Currency Accounts plus the Customer Margin.

(b)You can find out what the actual Debit Balance – Base Interest Rate is at any time by visiting the “Business” tab on nab.com.au and search “Foreign Currency Account Rates” or you can contact us for information about current rates.

(c)Interest is calculated daily at the end of each day on the Value Balance (excluding any amount to which a Default Interest Rate applies) by applying the daily interest rate, which is the relevant yearly interest rate divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms).

(d)The “Value Balance” is the overdraft account’s debit balance, except that interest charges for an Interest Period (including any interest adjustment) do not form part of the Value Balance until the first day of the next Interest Period (even though they may be included in overdraft account’s debit balance from the date they are debited).

(e)Interest for:

(i)an Interest Period is debited to your overdraft account on the last Business Day of that Interest Period; and

(ii)the last Interest Period is debited to your overdraft account on the Final Repayment Date.

(f)Where a transaction for a particular day is processed by us after that day, for whatever reason, we may elect to back-date that transaction and, if we do this, an appropriate interest adjustment will be made to your overdraft account on the next interest debit date.

2.6What currency applies

(a)You must ensure that all payments for the Foreign Currency Overdraft Facility are in the currency of the overdraft account.

(b)Fees and charges are calculated in Australian Dollars and may be debited to the overdraft account with any necessary currency conversions made in accordance with the provisions of the ‘NAB Foreign Currency Account — Onshore Terms and Conditions’.

3.LETTERS OF CREDIT

3.1Specific requirements before we will issue a Letter of Credit

Please refer to clause 4 of the Business Lending General Terms which sets out the basic requirements for each use of a Facility, except a Drawdown Notice is not required. Our additional requirements to issue a Letter of Credit are:

(a)before the relevant cut-off time for the requested issue date (which we will notify you upon request) you must give us:

(i)an application through NAB Connect, or a properly signed application in a form acceptable to us requesting us to issue a Letter of Credit. The application must set out the name of the proposed beneficiary, the requested amount, the issue and expiry dates and any requirements concerning the form of the requested Letter of Credit; and

(ii)any other documents or information we require (see clause 3.3(b) below); and

(b)we need to be satisfied that (unless we’ve agreed otherwise):

(i)the Issue Date is a Business Day before the Final Repayment Date;

(ii)the currency of the Letter of Credit is one we approved in writing for the Facility; and

(iii)the requested Letter of Credit amount, when notionally converted to Australian Dollars (which we determine at our prevailing spot rate of exchange) would not cause the Facility Limit for the Facility to be exceeded.

3.2If we are unable to issue a Letter of Credit

Sometimes there may be legal or operational reasons we can’t issue a Letter of Credit. We will let you know if this is the case. Examples include:

(a)you request a Letter of Credit in a foreign currency that we have not approved; or

(b)a service we require in order to issue a Letter of Credit is temporarily disrupted or unavailable.

3.3The form of the Letter of Credit

(a)Each Letter of Credit will be in our usual form, unless we agree otherwise.

(b)In certain circumstances specific to a Letter of Credit, we may require you to execute additional documentation in accordance with our normal practice to manage risks in connection with the Letter of Credit. Unless you comply, we may not be able to issue the Letter of Credit.

(c)All Letters of Credit issued under the Facility will be subject to the terms and conditions of the prevailing Uniform Customs and Practice for Documentary Credits or International Standby Practices (as published by the International Chamber of Commerce) or such other terms as we agree in writing. You must ensure you are aware of those terms and conditions and accept them, including any indemnities required to be provided except to the extent the liability, loss or Costs are caused by our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our employees, officers and agents).

3.4Authority to pay

(a)You irrevocably authorise us to pay any amount for which a demand or request is made at any time under a Letter of Credit without reference to you, and without further authority from you.

(b)We need not investigate or enquire whether a claim or demand has been properly made.

(c)We may meet any claim or demand even if you dispute its validity.

(d)Unless a Standby Letter of Credit’s terms say otherwise, we may at any time end our obligations under a Standby Letter of Credit by paying to the Beneficiary an amount up to the Maximum Liability (or any lesser amount that discharges our obligations under it). We may do so even though the Beneficiary has not demanded payment.

3.5Your undertaking to pay

(a)You must pay or reimburse us the amount of each payment we make under a Letter of Credit, or on any Bill drawn on and accepted by us in connection with a Letter of Credit, immediately on such payment or Bill being drawn.

(b)You irrevocably authorise us to debit your Nominated Account, or any of your accounts maintained with us (including any deposit account opened by us in your name under these Specific Conditions) (Other Account), in relation to any such amounts payable by you under this clause 3.5.

(c)We may, without notice and without making a demand on you, debit the Nominated Account or an Other Account, even though another provision of the Bank Documents says that the amount is payable on demand.

(d)We may, without notice and without making a demand on you, take and apply any cash cover held by us in the Nominated Account or an Other Account pursuant to the Bank Documents against any of your obligations under the Bank Documents, including where we voluntarily paid out the Letter of Credit. You irrevocably authorise us to do anything necessary for that purpose, and regardless of whether the Facility has expired.

(e)We are not obliged to debit the Nominated Account or any Other Account with any amount payable by you under the Bank Documents, and nothing in this clause relieves you of your obligation to pay each amount to us when due under the Bank Documents.

(f)You agree to indemnify us (and any of our officers, employees and agents), any receiver or receiver and manager appointed under a Bank Document (and any of their respective officers, employees and agents) and any attorney appointed by you under a Bank Document, (and any of their respective officers, employees and agents) in respect of:

(i)any amounts we pay to a Beneficiary under a Letter of Credit; and

(ii)any loss, damage and Costs which we incur or for which we become liable, directly or indirectly in connection with:

(A)the issue or variation of a Letter of Credit;

(B)any payment or claim for payment under a Letter of Credit; or

(C)anything done by a Beneficiary or any other person in relation to or in reliance on a Letter of Credit;

(D)any termination or cancellation of a Letter of Credit other than on its scheduled expiry date,

excluding consequential loss, economic loss and also excluding losses, damage or Costs to the extent directly caused by our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our employees, officers, agents and External Administrators). This indemnity does not limit, and is in addition to, any other indemnity or obligation in our favour under any other Bank Document or given by law.

(g)You must pay us any indemnified amounts in Australian Dollars (even if the payment we made is in a different currency), unless we agree otherwise in writing.

(h)You must pay any indemnified amounts at each of the following times:

(i)the date we make payment under a Letter of Credit;

(ii)the date we incur a present obligation to make payment under a Letter of Credit (where the conditions to the payment, such as presentation of the Letter of Credit, have been satisfied); or

(iii)when Default occurs; or

(iv)the date we take Enforcement Action under the Bank Documents.

(i)Each of your payment obligations under this clause 3.5 is independent of each of your other payment obligations under this clause 3.5.

3.6Bills drawn on us in connection with a Letter of Credit

We will accept any Bills drawn on us in connection with a Letter of Credit on presentation and make payment in accordance with the terms of the Bill. You must pay and indemnify us for doing so in accordance with clause 3.5.

3.7Insurance

You must:

(a)insure all goods relating to each Letter of Credit drawn under the Facility to our satisfaction (unless we otherwise agree in writing);

(b)give us a copy of any insurance policy or certificate relating to those goods when received or at such time as is agreed with us; and

(c)hold proceeds of any claim under an insurance policy on trust for us unless we otherwise agree in writing.

3.8Use of correspondent banks

We may direct a Letter of Credit to our correspondent bank for negotiation or other action. If we do this, the correspondent bank may pay us a commission for each Letter of Credit directed to them and you consent to us receiving any such commission.

3.9Pledge

(a)As security for your obligations to us in connection with each Letter of Credit, you authorise us to retain by way of pledge the documents and goods relating to the Letter of Credit, all proceeds of sale and insurances relating to such documents and goods, and all of your rights as unpaid seller.

(b)If we request, you agree to execute any other documents that we reasonably require to grant us a Security Interest in the documents and goods relating to a Letter of Credit.

3.10Additional consequences of Default

(a)If you are in Default and we are entitled to take Enforcement Action, in addition to any other rights and obligations under the Business Lending General Terms:

(i)we may require you to provide cash cover on terms satisfactory to us for an amount not more than the Maximum Liability under each outstanding Letter of Credit, in the currency of the Letter of Credit;

(ii)where the Facility Amount Owing has become due and payable, we may sell, dispose of or otherwise deal with any documents or goods pledged to us as security as we think fit and apply the proceeds towards satisfaction of your obligations to us in connection with the relevant Letters of Credit;

(iii)we may collect any amount due under any policy of insurance in relation to any goods; and

(iv)we may require you to grant other Security Interests acceptable to us.

(b)We may exercise any of our rights under the Bank Documents even though one or more Letters of Credit remain outstanding on that date.

(c)If, on a day when you provide cash cover or make a payment required under the Business Lending General Terms when you are in Default, a portion of that money is to cover undemanded amounts under Letters of Credit that we have issued, then clause 3.13 will apply for the holding of that portion of money.

3.11Delivery of documents or goods

If any documents or any goods in relation to a Letter of Credit are:

(a)delivered by us to you or to any person authorised by you to receive those documents or goods on your behalf; or

(b)received by you (or by any such person on your behalf),

before you have fully paid and discharged your obligations to us in relation to the Letter of Credit, you agree that:

(c)if directed by us acting reasonably, you must receive those goods or documents for us and must hold them and any proceeds of sale on trust for us and keep them separate from other goods and money;

(d)you must hold the proceeds of any claim on any policy of insurance on trust for us; and

(e)we may at any time take possession of and receive the goods or any proceeds of the sale or disposal of the goods.

3.12Final Repayment

On the Final Repayment Date, you must pay us:

(a)the Facility Amount Owing, less

(b)the amount of cash cover you have provided us which is still available to us up to the total Maximum Liability amounts under any unexpired Letters of Credit on issue.

3.13Deposit of cash held to cover undemanded Letters of Credit

(a)Where a portion of the cash cover paid to us under clause 3.10(a)(i), clause 3.12 or clause 7.1(c) is to cover undemanded amounts under Letters of Credit that we have issued, then we will deposit that portion in an interest bearing term deposit account (which account may be with us) on terms we consider appropriate.

(b)You must provide us with a Deposit Letter for all money to be held by us in such a term deposit account, and we will hold that money until it is:

(i)applied towards paying a Beneficiary of a Letter 0f Credit; or

(ii)paid to you after all of your obligations (contingent or otherwise) under the Bank Documents have been satisfied, together with any interest earned on the term deposit account (net of our income tax liability in connection with those earnings).

(c)Where the required term deposit account is provided by us, we may charge you the usual fees and charges for the operation of such an account.

(d)Your obligations under the Facility continue for any Letters of Credit in respect of which payment of the whole or part of the Maximum Liability has not yet been demanded by the Beneficiary.

3.14Interest

Interest charges will apply where a Letter of Credit under a Documentary Letter of Credit &/or Documents Surrendered &/or Trade Refinance Facility is refinanced.

4.TRADE REFINANCE FACILITY OR OVERSEAS BILLS PURCHASED FACILITY

4.1Specific requirements to use a Trade Refinance Facility or Overseas Bills Purchased Facility

Please refer to clause 4 of the Business Lending General Terms which set out the basic requirements for each use of a Facility. In addition, before you can use a Trade Refinance Facility or Overseas Bills Purchased Facility:

(a)you must give us any other documents or information we require before the relevant cut-off time for the requested date of use (which we will notify you upon request); and

(b)we need to be satisfied that (unless we’ve agreed otherwise):

(i)the currency of the Facility is one we approved in writing for the Facility; and

(ii)the requested use amount, when notionally converted to Australian Dollars (which we determine at our prevailing spot rate of exchange) would not cause the Facility Limit to be exceeded.

4.2What if we can’t meet a requested use?

Sometimes for legal or operational reasons we will decline a requested use of a Facility. We will let you know if this is the case. Examples include where you have requested a foreign currency that we have not approved, or a service we require in order to make the requested use available is temporarily disrupted or unavailable.

4.3Repayments and prepayments

(a)Each use of a Facility is for an agreed term, and you must repay the outstanding amount for each use in full at the end of the agreed term for that use. Where we’ve agreed, you can prepay all or part of the outstanding amount beforehand.

(b)Any amount repaid or prepaid before the Final Repayment Date will not reduce the Facility Limit. So, you may ask to redraw back up to the Facility Limit. Any such further use of the Facility is subject to the Business Lending General Terms and these Specific Conditions.

4.4Interest

(a)If the Facility Details state that interest is payable in arrears, then:

(i)all accrued interest for each use of the Facility is payable and debited to your Nominated Account on the last day of the agreed term for that use, (or if not a Banking Day, then on the last Banking Day of the term); and

(ii)all accrued but unpaid interest is payable and debited to your Nominated Account on the Final Repayment Date.

(b)If the Facility Details state that interest is payable in advance, interest for each use of the Facility is:

(i)calculated based on the outstanding amount at the first day of the agreed term of use and for the number of days in that term; and

(ii)payable and debited to your Nominated Account on the first Banking Day of that term.

(c)You can find out what the actual interest rate is at any time by visiting the “Business” tab on nab.com.au and search “Rates Fees and Charges” to find the relevant indicator rate. The full method of calculation of your interest rate is set out in the Facility Details.

(d)You can also contact us to find out the interest rate that will apply. The interest rates we quote for a day will apply if you use the relevant Facility by a certain cut-off time on the day. We can let you know the cut-off time too. We will confirm the applicable interest rate following drawdown.

5.CANCELLATION AND REDUCTION OF THE FACILITY LIMIT

(a)You can cancel a Facility at any time by giving us at least 2 Business Days’ prior written notice. You must then pay us the Facility Amount Owing for the Facility on the date the cancellation takes effect.

(b)We can cancel any part of the unused Facility Limit at any time (and in the case of a Foreign Currency Overdraft Facility, any part of the Facility Limit) after giving you at least 90 days’ written notice, even if the Facility has a later Facility Expiry Date, however we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action.

(c)You can decide to reduce the Facility Limit at any time by written notice.

(d)If the reduced Facility Limit is then lower than the amount used under the Facility, you will need to immediately repay us so that the Facility Limit is not exceeded. Our rights under this clause are in addition to any rights we have under the Business Lending General Terms.

6.WHICH ACCOUNTS WE CAN DEBIT

Unless otherwise agreed:

(a)for Foreign Currency Overdraft Facilities, you authorise us to debit your overdraft account with any amounts payable by you in relation to the Facility, including interest, fees and charges, taxes, enforcement expenses and any amount payable under an indemnity. Any necessary currency conversions for a debit will be in accordance with the ‘NAB Foreign Currency Account — Onshore Terms and Conditions’ applicable to the account; and

(b)for any other Facility, you authorise us to debit to your Nominated Account with any amounts payable by you in relation to the Facility, including interest, fees and charges, taxes, enforcement expenses and any amount payable under an indemnity. If the amount payable by you is in a different currency to the Nominated Account, we may notionally convert the amount at the rate of exchange we determine for a transaction of that size on that day against the account currency for the debit. The exchange rate used will be notified in a confirmation we will provide to you, outlining the transaction, the rate used and any fees.

7.FOREIGN CURRENCY FACILITIES OR TRANSACTIONS

7.1Funding risk and non-availability

(a)We will use our best efforts to notify you as soon as practicable if having your Facility in a foreign currency is not reasonably practicable or impossible as a result of:

(i)any change in national or international financial, political or economic conditions, currency exchange rates, currency availability or exchange controls;

(ii)any event or contingency which materially and adversely affects the inter-bank, currency or financial markets generally; or

(iii)any change in any law (including the introduction of a new law), or any change in the interpretation or administration of any law.

(b)During the 30 days after a notice is given, we will discuss with you any alternative basis to continue the affected Facility.

(c)If no agreement is reached within that 30 day period, the Facility automatically terminates and you must immediately repay in full the Facility Amount Owing. In the case of any outstanding Letters of Credit, you must also immediately provide cash cover on terms satisfactory to us for an amount not less than the Maximum Liability under each outstanding Letter of Credit in the same currency, and clause 3.13 will apply for the holding of that portion of money.

7.2Currency Indemnity

If a judgment or order is given by any court or tribunal for you to pay any amount or damages relating to the Facility in a currency different to the applicable currency for the Facility or the use of the Facility, you indemnify us against any deficiency in the amounts we receive arising or resulting from any difference between the exchange rates:

(i)used to convert the applicable Facility currency for the purpose of the judgment or order; and

(ii)at which we can buy the applicable Facility currency with the judgment currency at the time of our receipt.

7.3No advice or management by NAB

You acknowledge and agree that we do not, and you must not rely on us to, manage, supervise or advise you in relation to your foreign currency exposure, whether or not related to any Facility.

7.4Foreign currency fluctuations

If a change in the exchange rate between a foreign currency of a Facility or use of a Facility and Australian Dollars causes the outstanding amount under the Facility (when notionally converted by us to Australian Dollars at our prevailing spot rate of exchange) to exceed the Facility Limit in Australian Dollars (when notionally converted by us at the rate of exchange we used at the time of approving the Facility), we may require you to either (at your option):

(a)repay a sufficient amount of the Facility equal to that excess; or

(b)provide additional Security Interests acceptable to us to the value reasonably determined by us, but not less than the amount of such excess.

8.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in these Specific Conditions with a specific meaning are either explained in the Facility Details, the Business Lending General Terms or below.

Beneficiary means a person to whom we have issued a Letter of Credit.

Bill means a documentary bill of exchange.

Deposit Letter means a security agreement in the form we require from time to time which grants us a Security Interest in a deposit account.

Issue Date means the date a Letter of Credit is issued or is to be issued by us.

Letter of Credit means documentary letter of credit or standby letter of credit issued or to be issued under the Facility.

Maximum Liability means, in respect of a Letter of Credit, the maximum amount we are or may become liable to pay under that Letter of Credit (excluding interest on that amount).

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 15

NAB Business Markets Loan

1.HOW THIS FACILITY WORKS

We want to support your business.

The Business Markets Loan is an interest in arrears term loan with market-linked pricing and a choice of interest rate risk management options including a:

•Floating Rate,

•Cap Rate,

•Fixed Rate, and

•Flexible Maturity Fixed Rate.

Once the Facility is approved, a combination of Components can be set up under the total Facility Limit. In addition to keeping within the Facility Limit and Facility Expiry Date, each Component has its own limit, and may have its own term, which can’t be exceeded. A feature of this Facility is the ability to switch between Components over time within the total Facility Limit.

The Drawdown Schedule will show the initial Component limits and the type of interest rate arrangement for each Component.

This Facility is generally not repayable upon demand except on the Final Repayment Date or when a Default has occurred and we are entitled to take Enforcement Action.

2.GETTING STARTED

Before we get started and you can use this Facility:

•we will need everything set out in clause 3 of the Business lending General Terms; and

•you will need to nominate or set up and maintain a linked bank account with us in your name. This will be your Nominated Account for transactions for this Facility. The NAB Business Products Terms and Conditions also govern use of that account. A Drawdown Notice is not required to use this Facility.

3.ALLOCATING COMPONENTS

Each use of this Facility needs to be allocated to one of the Components.

(b)You can request a Component be established or used by giving us a Drawdown Notice at least 7 Banking Days before the requested establishment of a Component or 1 Banking Day before the requested use of a Component. Once a Drawdown Notice is given, you can’t change or cancel the requested allocation or use. Please note that we may need to adjust allocations to make sure that a Component Limit and the Facility Limit won’t be exceeded.

(c)If for any reason an amount used under the Facility isn’t allocated to a particular Component, we will allocate it to the Floating Rate Component. For example, if the term for a Fixed Rate Component ends (or the term for a Flexible Maturity Fixed Rate Component ends without you extending it), we will reallocate any amounts used under that Component to the Floating Rate Component. In these cases we will increase the Floating Rate Component limit if necessary to allow for this.

(d)If you want to open a new Fixed Rate, Flexible Maturity Rate or Cap Rate Component within your
Facility Limit, we will reallocate the new Component limit from the Floating Rate Component to
the new Component. We will reduce the Component limit for the Floating Rate Component limit

by this amount.

(e)Each time there is a change in use of a Component, we will send you an up to date Drawdown Schedule. This will show each of the Component limits under the Facility over the remaining Pricing Periods.

4.PRICING PERIODS

(a)The available Pricing Periods to select from are shown in the Facility Details. The first Pricing Period begins on first use of the Facility (begin the first drawdown under the Facility). Each subsequent Pricing Period commences on the day immediately following the expiry of the previous Pricing Period. Unless you select the length of any future Pricing Period in accordance with any instructions we provide before the expiry of an existing Pricing Period, the next Pricing Period will be of the same duration as the existing Pricing Period, calculated before taking account of any adjustment of the existing Pricing Period under this clause 4-

(b)Pricing Periods can only start and end on a Banking Day. If a Pricing Period would otherwise end on a non-Banking Day, we can change it to end on the next Banking Day if that Banking Day falls on or before the Facility Expiry Date. Otherwise we can change it to end on the previous Banking Day.

(c)If you want to change a Pricing Period, you will need to contact us. Any such change will need to be agreed by us at the time. Please note that new interest rates will apply from the start of the new Pricing Period.

5.INTEREST RATES AND RATE NOTICES

(a)The Facility Details will show the initial yearly interest rates for each Component. If not shown in the Facility Details, or if a percentage rate is stated as ‘indicative’, we will determine and notify you of the applicable rate on or after your first use of the Facility.

(b)If you want to open a Component within your Facility Limit, we will notify you of the applicable interest rate after the start of the initial Pricing Period for that Component.

(c)For each Pricing Period we will send you a Rate Notice showing you the applicable interest rates and interest, fee and premium charges for each Component over that Pricing Period. This will also show the weighted average of all interest rates applying across all your Components, so you can see how you are going overall.

(d)You can always contact us to find out the interest rate that will apply for a Component. The interest rates we quote on a particular day will apply if you use the relevant Component by a certain cut-off time on that day. We can let you know the cut-off time too.

5.1Floating Rate

(a)The interest rate for a Floating Rat e Component is the Business Lending Rate plus the Customer Margin.

(b)The Business Lending Rate is our indicator rate and is calculated according to:

•the Australian Bank Bill Swap Reference Rate (Bid) administered by ASX Benchmarks displayed on the BBSY page of the Thomson Reuters Screen on the first day of a Pricing Period for a period equal to that Pricing Period (or where the Pricing Period is less than 1 month, a period of 1 month) and which starts on that day. If the rate for a Pricing Period cannot be determined in this manner or if, in our reasonable opinion, the rate becomes inappropriate, the rate reasonably determined by us to be the appropriate equivalent rate having regard to the prevailing market; plus

•our minimum return margin for a period equal to the Pricing Period which we can change from time to time.

(c)We will periodically publish one or more indicative Business Lending Rates on nab.com.au and you

can contact us for information about current rates.

(d)The Floating Rate is reset at the beginning of each Pricing Period.

5.2Cap Rate

The interest rate for a Cap Rate Component is the lower of the Cap Rate and the Floating Rate on the first day of a Pricing Period and is reset at the beginning of each Pricing Period.

5.3Fixed Rate

The interest rate for a Fixed Rate Component is a fixed interest rate set at the start of the Fixed Rate Component term (the rate is not reset at the beginning of each Pricing Period).

5,4Flexible Maturity Fixed Rate Component

(a)The interest rate for a Flexible Maturity Fixed Rate Component is a fixed interest rate set at the start for the Flexible Maturity Fixed Rate Component term (the rate is not reset at the beginning of each Pricing Period).

(b)When setting up a Flexible Maturity Fixed Rate Component, you must nominate one further period after the original Component term ends. If a further period is agreed, and you wish to extend the Flexible Maturity Fixed Rate Component term for the agreed further period at the same fixed rate, you will need to notify us in writing at least 2 Banking Days before the original Flexible Maturity Fix ed Rate Component term ends. We will then extend the term for the Flexible Maturity Fixed Rate Component at the same fixed interest rate accordingly.

6.INTEREST CHARGING

(a)Interest is calculated daily during each Pricing Period on the outstanding amount of each Component at the applicable yearly interest rate for the Component divided by 365.

(b)Accrued interest for all Components in a Pricing Period is payable up to 2 Banking Days after the end of each Pricing Period, and will be debited by us from your linked transaction account. This occurs over all Pricing Periods until the Final Repayment Date.

7,CAP RATE PREMIUM

(a)For us to take risk by agreeing to charge the lower of the Cap Rate and the Floating Rate over the Cap Rate Component t erm, we have to enter arrangements and incur a cost. In exchange for us agreeing to do this, you agree to pay us the Cap Rate Premium for the Cap Rate Component as specified in the Drawdown Schedule, even if the Facility terminates before the Facility Expiry Date for any reason.

(b)If you open a new Cap Rate Component, the Cap Rate Premium will be set out in the next Rate Notice we send you.

8.CANCELLATION AND REDUCTION OF FACILITY LIMITS

(a)We may cancel all or part of the unused amount of the Facility Limit or an unused Component limit on the Last Date for Drawdown.

(b)If your Principal Repayments are to be made periodically:

(i)the Facility Limit automatically reduces by each Principal Repayment amount when due; and

(ii)any Component limits automatically reduce as specified in the Facility Details (or as otherwise agreed with you).

(c)You may cancel all or any part of the unused amount of the Facility Limit or an unused Component limit by giving us at least 7 days prior written notice. However we may agree a shorter period.

(d)Please note that we cannot reinstate all or any part of a cancelled limit.

(e)If you cancel all or part of the Facility Limit, you can no longer use the cancelled limit.

(f)If a limit is scheduled to change on a non-Banking Day, that change will not take effect until the following Banking Day (unless we agree otherwise) and interest, fees and charges will be payable accordingly.

9.REPAYMENT AND REDRAW

(a)You must make Principal Repayments in the required amounts and at the required times as set out in the Facility Details or in the Drawdown Schedule.

(b)If the due date of a Principal Repayment set out in the Facility Details or Drawdown Schedule is not a Banking Day, it will be adjusted to be due on the next Banking Day, but if that adjusted date is a Banking Day in the next month, then the due date of the payment will be further adjusted to be the last Banking Day of that month.

(c)You may repay all or part of a Component early but we will first need a notice from you in a form acceptable to us. In the case of a Floating Rate Component or a Cap Rate Component, we need at least 1 Banking Day prior notice. For other Components, we need at least 7 days prior notice.

(d)If you repay early only part of a Component, your Principal Repayments will not change and you will still need to make the Principal Repayments in the required amounts and at the required times, unless we agree otherwise.

(e)Repayments of a Floating Rate Component or a Cap Rate Component do not reduce the applicable Component limit. So, you may ask to redraw under those Components back up to the Component limits. Any such further use of the Facility is subject to the Business Lending General Terms and these Specific Conditions.

10.CAN YOU GIVE US VERBAL INSTRUCTIONS?

We may act on your verbal instructions, but aren’t obliged to do so. We may need instructions to be in writing to act on them.

11.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in these Specific Conditions with a specific meaning are explained in the Facility Details, the Business Lending General Terms or below.

Component means a component under the Facility which could include a Floating Rate component, a Cap Rate component, a Fixed Rate component or a Flexible Maturity Fixed Rate component.

Drawdown Schedule means the one specified in the Facility Details, or another drawdown schedule we provide to you.

Pricing Period means the period that you select from the available options in the “Pricing Period” section in the Facility Details and which you tell us about prior to using the Facility, unless another period is required under the Bank Documents or we agree to a different period.

Principal Repayments means the principal repayments specified in the Facility Details or such other amount as specified in a Drawdown Schedule.

Rate Notice means a notice from us setting out the applicable interest rates and interest charges for each Component over a Pricing Period.

Borrowing Base Annexure to the Global Trade Finance Specific Conditions

1.WHAT THIS DOCUMENT IS ABOUT

This Annexure applies if the Facility Details for a Trade Refinance Facility specify that it applies. It is to be read in conjunction with the Business Lending General Terms and the Global Trade Finance Specific Conditions which apply to this Facility.

2.ADDITIONAL SPECIFIC REQUIREMENTS FOR USE OF THE FACILITY

In addition to clause 4 of the Business Lending General Terms and clause 4 of the Global Trade Finance Specific Conditions, the additional requirements for the first drawing of the Facility are set out in clause 2.1 and the additional requirement for each use of the Facility is set out in clause 2.2.

2.1First drawing

Before you provide us with the first Drawdown Notice under the Facility, we must have received the following, in form and substance satisfactory to us:

(a)a certified copy of each Relevant Document, properly completed and executed;

(b)a certified copy of each Insurance Policy and the certificate of currency relating to it;

(c)evidence that the Approved Inventory Location has been inspected by us and we have approved the quantity of Approved Inventory located at the Approved Inventory Location;

(c)evidence that we have been granted a right of entry to each Approved Inventory Location; and

(d)evidence that each security interest given in our favour, or which the Borrower or any Security Provider has under PPS Law, including any security interest it may have in inventory located at an Approved Inventory Location, has been registered under the PPS Law.

2.2Each drawing

Before you provide us with any Drawdown Notice under the Facility, we must have received any additional documents or information we reasonably request for the purposes of determining the Borrowing Base Limit or the operation of this Facility, in form and substance satisfactory to us.

3.DRAWDOWN NOTICE

Each Drawdown Notice must be substantially in the form attached to this Annexure. You may only submit a Drawdown Notice if:

(a)you have provided us with a Borrowing Base Report in accordance with clause 5.1(a);

(b)prior to and following the proposed drawing, no more than two drawings denominated in Australian Dollars would be outstanding; and

(c)prior to and following the proposed drawing, the Facility Amount Owing for this Facility would not exceed the Borrowing Base Limit.

4.ADDITIONAL PROMISES WE RELY ON

In addition to your other promises, you also make the following promises to us.

(a)All:

(i)receivables listed in a Borrowing Base Report are Approved Receivables and those receivables identified as Trade Credit Insured Receivables are covered under an Insurance Policy;

(ii)inventory listed in a Borrowing Base Report is Approved Inventory; and

(iii)of the information in each Borrowing Base Report are true and accurate and not misleading in any respect.

(b)You have good title to:

(i)the inventory and receivables listed in a Borrowing Base Report; and

(ii)the goods being sold to each buyer listed in a Borrowing Base Report,

free and clear of any Security Interest, and you are lawfully entitled to assign or grant any Security Interest over any receivable or inventory listed in a Borrowing Base Report, and there are no restrictions or prohibitions on you doing so.

(c)Each Relevant Document is in full force and effect, and has not been amended or terminated without our consent.

(d)Each Storage and Handling Agreement is on substantially the same terms as the standard industry terms.

(e)There is no current, pending or threatened dispute in respect of any Contract relating to the inventory or receivables listed in any Borrowing Base Report or any Storage and Handling Agreement.

5.ADDITIONAL UNDERTAKINGS

5.1Undertakings

In addition to your other undertakings to us, you must:

(a)provide to us an up-to-date Borrowing Base Report:

(i)on the first day of each monthly period following the date of this Agreement;

(ii)in respect of each drawing, no earlier than two Business Days before the proposed date of drawdown and no later than one Business Day before the proposed date of drawdown;

(iii)at such other times we may reasonably require;

The report must reflect the current position as at the date it is provided to us.

(b)unless we agree in writing:

(i)not agree to any variation or termination of any Relevant Document; and

(ii)provide to us, a certified copy of each Relevant Document and any variation to a Relevant Document, entered into after the date of this Agreement with our prior consent by no later than two Business Days after it is signed;

(c)unless we agree in writing:

(i)maintain each Insurance Policy and comply with all of the terms of the Insurance Policy;

(ii)ensure that we are notified within two Business Days of any change made to an Insurance Policy and promptly provide to us, a copy of all notices or other communications you receive under any Insurance Policy;

(d)ensure that:

(i)we (or the Inspection Agent) are permitted to undertake a field inspection in relation to any Approved Inventory Location and your debtor management systems at such times as we require subject to the following:

(A)each type of inspection is not undertaken more than once every half-year after the date of this Agreement (General Field Inspection);

(B)you receive at least than 30 days’ notice; and

(C)we (or the Inspection Agent) and the relevant personnel comply with the Approved Storage Location Operator’s operating procedures and occupational health and safety guidelines;

(ii)we (or the Inspection Agent) have access to all premises and records for the purposes of undertaking such field inspection;

(iii)you, if applicable, procure that the Inspection Agent provides to us a Site Quality Inspection Due Diligence Report in respect of each Approved Inventory Location;

(e)ensure that payments made by each buyer listed in a Borrowing Base Report are made directly to the Nominated Account (as defined in the Facility Details of this Facility) and that all invoices issued to such persons stipulate this; and

(f)comply with your own Risk Management Policy.

5.2Negative Pledge

You undertake to us that, for so long as you have any outstanding obligations or liabilities to us in connection with this Facility, you must:

(a)ensure that the Approved Inventory and Approved Receivables are not subject to any Security Interest except in our favour; and

(b)not sell, assign, dispose of or otherwise deal with any Approved Receivables (or any interest in them) to any person other than us.

6.ADDITIONAL REVIEW EVENT

(a)Each of the following is a review event (Review Event):

(i)any of the following persons is Insolvent:

(A)an Approved Storage Location Operator operating a location where Approved Inventory is stored; or

(B)an Approved Buyer in respect of which any Approved Receivable remains outstanding from that Approved Buyer.

(b)Promptly after you become aware that a Review Event has occurred, you must give us full details of that Review Event and any steps you have taken, or are proposing to take, to remedy it.

(c)You and we agree to enter into negotiations for at least 30 days (Review Period), with a view to agreeing terms on which we would be prepared to offer to provide, fund or maintain all or any of this Facility.

(d)If agreement is reached, you must do all acts and execute all documents as we reasonably require to document, or to protect, preserve or secure our rights and interests under, such agreement.

(e)If agreement is not reached by the end of the Review Period or if you fail to comply with your obligations under clause 6(d), an additional Adverse Event will arise and we may exercise any of our rights set out in this Agreement.

7.ADDITIONAL ADVERSE EVENTS

Clause 11 (Default) of the Business Lending General Terms — which sets out provisions in relation to Default, including Payment Defaults and Adverse Events (and their consequences) — applies to this

Agreement. In addition, as this is a Specialised Facility, an Adverse Event will also occur under this Facility if:

(a)an Approved Insurer of an Insurance Policy held by you is Insolvent; or

(b)clause 6(e) applies.

8.ADDITIONAL CONSEQUENCES OF DEFAULT

If you are in Default and we are entitled to take Enforcement Action, in addition to any other rights and obligations under the Business Lending General Terms:

(a)we (or an Inspection Agent) may undertake an inspection in relation to any Approved Inventory Location and your debtor management systems at any time within ordinary business hours without prior notice (and subject otherwise to clause 5.1(d));

(b)we may require you to take any action that we consider reasonable and appropriate in relation to any Insurance Policy (including requiring you to assign any Insurance Policy to us); and

(c)in respect of an Approved Buyer, we may:

(i)require sales agreements and receivables to be assigned or novated to us; and

(ii)exclude the receivables owing by that Approved Buyer from the Borrowing Base Limit.

9.POWER OF ATTORNEY

(a)You irrevocably, for valuable consideration, appoint us and each of our authorised officers severally to be your attorney (Attorney) to execute and deliver all documents and instructions and do all things under and in connection with any Insurance Policy.

(b)The Attorney may appoint or remove any substitute or delegate or sub-attorney.

(c)You agree to ratify anything done by the Attorney in exercising its powers under this clause.

10.FOREIGN CURRENCY TRANSACTIONS

If the Facility involves a foreign currency and if the amount of a proposed drawing in a Drawdown Notice would cause the Balance Owing in Australian Dollars (when we notionally convert it at our prevailing Exchange Rate) to exceed the Borrowing Base Limit, we may amend the Drawdown Notice so that the Borrowing Base Limit will not be exceeded as a result of such drawing.

11.FEES

In addition to any other fees payable under this Agreement (including those set out in the Facility Details), you must pay the Drawdown Fee in respect of each drawing on the repayment date for that drawing.

12.ACKNOWLEDGEMENT AND CONSENT

You agree and acknowledge that, for the purposes of our ongoing monitoring of the Facility and to assist us to manage our risks under the Facility, we may wish to provide information about you and the Facility to a service provider (including any service provider located outside Australia). You irrevocably consent to this occurring, provided at all times that the service provider has obligations of confidentiality to us.

13.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in this Annexure with a specific meaning are explained in the Facility Details, the Business Lending General Terms or below.

Advance Rate means the rate corresponding to the relevant inventory category and Approved Storage Location, as follows:

Inventory categoryApproved Storage LocationAdvance RateTier 1 — All:WheatBarleySorghumCanolaPasture Genetics Pty LtdSeed Genetics Australia Pty LtdO’Neil Transport Pty LtdLand Storage and Distribution Pty LtdMonaro Freight Pty LtdTasmanian Freight Services Pty LtdRural Logistix Pty LtdLeocata’s Transport Pty LtdGippsland Couriers Pty LtdK&S Seed Processors Pty LtdLandmark Corporation Pty LtdNorthern Agri Services Pty LtdPursehouse Rural Pty LtdAusWest Seeds Pty LtdHolbrook Seeds Pty LtdMaitland Clean Grain Pty LtdManoora Seeds Pty LtdModra Seeds Pty LtdMorton Seed and Grain Pty LtdUpper Murray Seeds Pty LtdLovitts Seeds Pty LtdTasmanian Seed Dressing and Storage Company Pty LtdAGF Seeds Pty LtdBaker Seeds Pty LtdFrances Seeds Seed Pty LtdLSD ToowoombaLand TSP Pty LtdTatiara Seeds Pty LtdHeazlewood Seeds Pty LtdKongal Seeds Pty LtdPGG Wrightson Seeds Pty Ltd60%Tier 2 — All:LupinsPeasBeansLentilsChick PeasVetchSunflowerWhite CloverMedicLucerne (Alfalfa)SunflowerTriticaleRye GrassFescueOats60%

Approved Buyer means:

(a)a person named, from time to time, as a buyer approved by the insurer (or approved by you exercising a delegated authority granted by the insurer) as being covered under an Insurance Policy;

(b)such other persons approved us in writing,

who purchases goods or services or both from you.

Approved Insurer means:

(a)in respect of Trade Credit Insured Receivables, Atradius; and

(b)in respect of Approved Inventory, an insurer acceptable to us.

Approved Inventory means inventory described in the table in the definition of Advance Rate (including all industry accepted grades and sub type of the types listed as such) which inventory also satisfy the following criteria:

(a)the country of origin is not a Sanctioned Country;

(b)stored in the Approved Inventory Location;

(c)covered by an Insurance Policy; and

(d)pre-sold on standard industry terms.

Approved Inventory Location means each of the following locations:

(a)All ‘Approved Storage Locations’ listed above; and

(b)such other locations as agreed between us and you in writing provided that we are granted a right of entry in form and substance satisfactory to us in respect of each such location.

Approved Receivables means receivables of yours in respect of which:

(a)the buyer is an Approved Buyer;

(b)payment has not remained outstanding for more than 21 days past the invoice due date; and

(c)the invoice is due and payable in full in accordance with terms approved by us and not subject to any dispute, counterclaim or set-off.

Approved Storage Location Operator means all storage locations listed above, or such other operators as you and we agree in writing.

Borrowing Base Limit means the lesser of the Facility Limit and the total of the following:

(a)Advance Rate of the Agreed Average Selling Price of each Approved Inventory that is within the relevant Location;

(b)80% of the book value of Trade Credit Insured Receivables that are within the relevant Buyer Limit (provided that if the resulting amount comprises an amount for an Approved Buyer that exceeds its Buyer Limit, then any amount exceeding its Buyer Limit will be disregarded for the purposes of this calculation).

Borrowing Base Report means a report which provides information in relation to the Approved Inventory and Approved Receivables including:

(a)information in sufficient detail for us to be able to identify type, grade, volume, value and location of inventory and identify amounts receivable from each Approved Buyer;

(b)details of all Approved Inventory, including:

(i)country of origin;

(ii)location;

(iii)product type;

(iv)quantity;

(v)grade;

(vi)average sale price;

(vii)weekly Inventory valuation price (to be calculated using the Current Market Value of Approved Inventory);

(viii)total value;

(c)summary details of each invoice in relation to each Approved Receivable listing amounts owed to you by Approved Buyers including:

(i)name;

(ii)payment terms;

(iii)credit limit;

(iv)invoice reference number;

(v)date of issue of invoice;

(vi)value of invoice; and

(vii)due date for payment in relation to invoice;

(d)a summary sheet showing the calculation made to arrive at the Borrowing Base Limit, such summary sheet to be in the form agreed by us.

Buyer Limit for an Approved Buyer means in respect of a Trade Credit Insured Receivable, the lesser of the limit specified for a buyer under the Insurance Policy and any limit nominated for that buyer by us from time to time.

Contract means a contract for goods or services.

Current Market Value means the current market value calculated using the method determined by us from time to time.

Drawdown Fee means $100 per drawing.

General Field Inspection has the meaning it has in clause 5.1(d)(i)(A) of this Annexure.

Inspection Agent means RSM or any substitute agent appointed by us from time to time.

Insurance Policy means each insurance policy set out below:

(a)an insurance policy issued by an Approved Insurer in your and our name as first loss payee in form and substance satisfactory to us covering commercial default or non-payment (and country risk if applicable) in relation to the payment obligations of the buyer under a Contract and each Invoice related to that Contract;

(b)an insurance policy issued by an Approved Insurer in your and our name as first loss payee in form and substance satisfactory to us covering all risk and any losses and covering 100% of the Approved Inventory; and

(c)any other insurance policy required by us in connection with the inventory and receivables listed in a Borrowing Base Report.

Location Limit, in respect of an Approved Inventory Location, means the limit nominated for that Approved Inventory Location by us from time to time.

Relevant Document means each of the following:

(a)each sales agreement entered into by you on terms substantially the same as the sales terms approved by us;

(b)storage and handling terms approved by us which includes rights for the you or us to control and deal with the stored inventory in agreed circumstances;

(c)each Storage and Handling Agreement on terms substantially the same as the storage and handling terms approved by us; and

(d)your Risk Management Policy.

Risk Management Policy means a risk and collections policy with respect to inventory and receivables management.

Sanctioned Country means a country affected by Australian sanction laws as notified by the Commonwealth Department of Foreign Affairs and Trade at http://dfat.gov.au/international-relations/security/sanctions/sanctions-regimes/Pages/sanctions-regimes.aspx

Site Quality Inspection Due Diligence Report means a site quality inspection due diligence report provided by the Inspection Agent addressed to us setting out the results of the inspection in relation to

[the Inventory and each Approved Inventory Location and covering any other matters as may be notified to you by us.

Storage and Handling Agreement means an agreement between you and an operator of a storage facility.

Tier 1 Approved Inventory means:

•Wheat

•Barley

•Sorghum

•Canola

Tier 2 Approved Inventory means:

•Lupins

•Peas

•Beans

•Lentils

•Chick Peas

•Vetch

•Sunflower

•White Clover

•Medic

•Lucerne (Alfalfa)

•Sunflower

•Triticale

•Rye Grass

•Fescue

•Oats

Trade Credit Insured Receivables means each Approved Receivable that is insured by an Approved Insurer for no less than 90% of the accounts receivable value.

Trade Refinance Facility or this Facility means any Facility titled ‘Trade Refinance Facility’ in the Facility Details to which this Annexure applies.

To:National Australia Bank Limited ABN 12 004 044 937

Level 3

1 Homebush Bay Drive

Rhodes NSW 2138

Attention: Borrowing Base Trade Refinance Team (NAB)

From: S&W Weed Company Australia Pty Ltd (ABN: 44 061 114 814) (Customer or We)

BORROWING BASE TRADE REFINANCE - DRAWDOWN NOTICE

We refer to the Business Letter of Offer between NAB and the Customer dated 13/02/2020 (Agreement).

We request NAB to provide the loan described in this form.

Section A   Request (complete all sections)

Proposed Drawdown Date
Facility Limit (Currency and amount of Facility Limit)	AUD16,000,000.00
Amount (Currency and amount of proposed drawing)
Term of drawing (Number of days)
Drawing Repayment Date

Proceeds of this drawing are to be credited to the Customer’s Nominated Account (as defined in the Agreement).

Section B   Repayment Instructions

On the Drawing Repayment Date, NAB is authorised to debit the Customer’s Nominated Account (as defined in the Agreement), with the Amount plus the applicable interest, fees and charges.

Section C   Borrowing Base Report

☐Copy of the Borrowing Base Report relating to this drawing is attached.

We certify the Borrowing Base Report accompanying this request is true and correct as at the date of this request.

Section D   Acknowledgement and Authority

We agree and acknowledge that:

• each of the conditions in the Agreement is satisfied on the date of this request except as otherwise notified to NAB.

• each of the “Promises we rely on” in the Agreement (including in the Borrowing Base Annexure) are true in respect of the facts existing at the date of this request.

• NAB may amend this request to reduce the amount of the proposed drawing in accordance with the terms of the Borrowing Base Annexure.

This request is governed by the terms and conditions of the Agreement.

This request is irrevocable.

For and on behalf of

(Full name and ACN/ABN of applicant)

By:

(Authorised Signature)(Authorised Signature)

(Name in block letters)(Name in block letters)

BUSINESS LENDING
GENERAL TERMS

Effective 24 June 2019

CONTENTS

1.What to readPage 03

2.How we will work with youPage 03

3.Getting startedPage 03

4.Using your FacilitiesPage 04

5.PaymentsPage 05

6.AccountsPage 06

7.RatesPage 06

8.Fees, taxes and CostsPage 07

9.Promises we rely onPage 08

10.Things you will do, or not doPage 10

11.DefaultPage 11

12.Change in law, anti-money laundering, counter-terrorism financing and sanctionsPage 15

13.Our securityPage 16

14.Changes we may makePage 18

15.Economic Costs and benefitsPage 19

16.CommunicationsPage 19

17.Interpretation, assignment and confidentialityPage 20

18.Meaning of wordsPage 21

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1. What to read

These Business Lending General Terms apply to all Facilities you have with us. They should be read with your Business Letter of Offer which lists the Facilities we are offering you. For each Facility the letter will include:

• Facility Details (such as the purpose, pricing, limits, expiry date and key financial terms); and

• •Specific Conditions (these govern the use of that type of Facility, together with these Business Lending General Terms).

The Facility Details and Specific Conditions may make changes to how these Business Lending General Terms apply to a Facility.

2. How we will work with you

2.1Our promise to you

We will act reasonably and fairly towards you, taking into account your and our respective business interests. That includes whenever we are:

• considering any request you make; or

• deciding whether to give our consent or to exercise a right, discretion or remedy; or

• setting any conditions for doing any of those things.

It’s worth noting that even if we don’t make a decision or do something straight away, we may still do so later on. This includes where we delay or defer doing so, or we temporarily waive a requirement.

2.2Our commitment to good banking practices

Doing the right thing is important to us. That’s why we’ve adopted the Banking Code which sets the standards of practice and service for banks. The Banking Code applies to our relationship with you if you are an individual or a small business as defined in the Banking Code.

You can obtain from us, on request:

• information on our current rates and standard fees and charges relating to the Facilities;

• general descriptive information concerning our banking services (including about cheques, account opening procedures, bank cheques, our confidentiality obligations and complaint handling procedures) and concerning the importance of reading the terms and conditions for each banking service we provide to you and informing us promptly when you are in financial difficulty;

• general descriptive information about the identification requirements of the Anti-Money Laundering & Counter Terrorism Financing Act 2006 and the options available to you under tax file number legislation; and

• a copy of the Banking Code.

To find out more about the Banking Code, visit nab.com.au and look up “Banking Code”.

3. Getting started

Before you can use any Facility we will need the following (unless we’ve told you otherwise):

• a properly accepted Business Letter of Offer (it may be electronically signed);

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• all Security specified in the Business Letter of Offer, satisfactory to us, with original title documents and anything else we need to register the Security and have it as first ranking security;

• details of any nominated or linked transaction account required in connection with the Facility;

• if we have asked you to insure any of your assets, evidence that you have obtained insurance we are comfortable with. That may include noting our interest on your policy; and

• anything else that the Facility Details ask for.

Also, we will need to be satisfied:

• with any valuation we require of your assets (this must be for a value, and from a valuer, we are comfortable with). See clause 13 for details;

• with our “know-your-customer” checks;

• with title, security, insolvency and corporate searches concerning you, any Security Provider and all Security assets. We will arrange these searches and let you know if there are any issues; and

• you are not in Default. See clause 11 for more details.

4. Using your Facilities

4.1Basic requirements for each use of a Facility

Once we’ve received everything we need for you to start using a Facility, the basic requirements for each use are:

• you have given us a Drawdown Notice beforehand (so we have time to check everything is in order and make any funding available). Unless the applicable Specific Conditions say otherwise, we will need this at least 2 Business Days before the requested date of use;

• in the case of the first use of the Facility, the requested date of use is no later than the Last Date for Drawdown (if any) set out in the Facility Details;

• in all cases, the requested date of use is a Business Day no later than the Final Repayment Date;

• the requested use is for a purpose, and meets any other requirement, as specified in the Facility Details;

• using the requested amount won’t cause any Facility Limit to be exceeded (and if the Facility has different components that you can use, it won’t cause any component amount specified in the Facility Details to be exceeded);

• each Security remains valid and enforceable and, in the case of a guarantee, no guarantor has ended or limited its obligations; and

• you are not in Default. See clause 11 for more details.

4.2Facility Limits

The Facility Details specify a limit for use of the applicable Facility, and whether that limit can

change. If a Facility has different components that you can use, the Facility Details will also specify each component amount, which is the limit for use of a component.

If you exceed any limit without our agreement, you must pay us the excess immediately. Until you do, we may charge you the applicable Default Interest Rate on that excess amount.

If you ask us in advance, we may let you temporarily exceed a limit. There may be a fee for exceeding your limit, which we will tell you about before we charge it. You will then need to pay us the excess when we ask you or on the date we’ve already agreed you will pay.

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4.3Reviewing your Facilities

We may review your compliance with the Bank Documents, your financial position and that of each Security Provider periodically (but at least annually).

You must give us all requested information, documents, consents and assistance in connection with a review. Following a review, we may continue to provide the Facilities on the same terms, or we may notify changes we may make under clause 14 or ask you and any Security Provider to vary Bank Documents or to enter new documents with us.

5. Payments

5.1Regular payments

You must pay us the amounts, and at the times, set out in the Facility Details and Specific Conditions.

On the Final Repayment Date you must pay all the Facility Amount Owing. We will give you at least 3 months written notice if we intend not to renew any Facility after the Final Repayment Date.

If any amount that we have not already told you about becomes payable under the Bank Documents, we will notify you and provide a reasonable time for you to pay.

5.2What currency must you pay us in?

You must pay us in Australian dollars unless the Specific Conditions say otherwise.

If you pay us in a currency other than the one which was due, we can convert your payment into the due currency. We will act reasonably when making the conversion, but any Costs involved in converting currencies will be added to what you must pay us. Please contact us if you require information about converting currencies.

This also applies if we are debiting an account of yours which is in a different currency to the due
currency.

5.3Payment rules

If and when you are required to make a payment under a Bank Document, that payment must be
made in full without any set-off, counterclaim, withholding or deduction, except as required by law (for example, where a court order permits). If you do have a dispute about a payment, please contact us
so we can seek to resolve this with you as soon as possible.

If a payment falls due on a non-Business Day, you can pay us on the next Business Day unless the
Specific Conditions say otherwise.

If we have not specifically agreed in your Bank Documents how we are to apply a particular payment,
we will act reasonably in applying payments we receive for any Facility Amount Owing against your
liabilities to us.

5.4Payments under other Bank Documents

In addition to your obligations under clause 5.1, you must pay us all amounts that you are
required to pay us under any other Bank Document in relation to credit or financial
accommodation that we provide to you, at the times set out in those other Bank Documents.
However, we will only enforce this Agreement for your failure to repay an overdraft or on-

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demand facility in another Bank Document if we have complied with our obligations under clause 11.1 (and the Banking Code, if applicable).

6. Accounts

6.1Dealing with your accounts

The Specific Conditions may require you to nominate or open accounts with us in your name in order to use a Facility. This is for recording transactions for the Facility.

We may also, at any time:

• open accounts with us in your name to record certain transactions relating to your Facilities; and

• debit any account held by you (or an account conducted by us in your name) with any Facility Amount Owing that is due and payable, or which we may become liable to pay in respect of a Facility, even if that causes an account to become overdrawn. If there are multiple accounts for your Facility, we can choose which account we debit from.

If you are in Default, we do not need to give you notice of this.

Where an account is overdrawn we may charge you interest on the overdrawn amount at the applicable Default Interest Rate. You must pay us the overdrawn balance of an account within a reasonable time after we ask, but doing so as soon as you can will minimise your costs.

We may sometimes have to adjust the recorded date of a debit or credit to an account. We will act fairly and reasonably in doing so.

6.2Account statements

We will give you any statements for your Facilities and accounts with us as required by the Banking Code, and may do so electronically. Statements of account will be provided every 6 months, unless we agree a different frequency or the Specific Conditions say otherwise.

7. Rates

The Facility Details and Specific Conditions specify the yearly rates and charges for a Facility. The Facility Details will say whether an applicable rate for a Facility (or, if applicable, for a component of a Facility) is a fixed rate, cap rate, floor rate, floating rate or variable rate, and how rates apply to the Facility. These details also include the available periods that rates apply for (sometimes referred to as interest periods or pricing periods). When a period ends, the next period starts on the last day of the previous period.

7.1Interest calculation and charging

Unless the Specific Conditions say otherwise, we will calculate applicable interest at the end of each day on the outstanding loan or debit account balance for each Facility you have with us, and charge it to you on the last Business Day of each month and on the Final Repayment Date for each of your Facilities.

Unless paid when charged, the interest will be debited to an account you have with us or added to the Facility Amount Owing. This could mean you have to pay interest on any unpaid interest charged to you.

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Daily interest is calculated at the annual interest rate divided by 365. For foreign currency Facilities, to get the daily rate we divide by 365 if in Fiji Dollars (FJD), Pounds Sterling (GBP) or Hong Kong Dollars (HKD), or by 360 in all other cases.

7.2Variable rates and floating rates

If a variable rate or a floating rate applies to your Facility (or any applicable component of your Facility), the rate will be made up of an “indicator rate” plus one or more margins, each as specified in the Facility Details and applicable Specific Conditions. A variable rate or a floating rate therefore may change from day to day with changes in the indicator rate or in a margin.

You can contact us to find out the indicator rate. If an indicator rate is less than zero, it will be deemed to be zero for determining the applicable rate for your Facility.

7.3Indicative rates

A rate listed in the Facility Details as ‘indicative’ or a ‘current rate’ is a guide only, and may not be the actual rate that applies. The Specific Conditions explain how the actual rate is determined and advised to you.

7.4Default Interest Rate

It is important that you pay all amounts on time and don’t exceed your Facility Limits. The applicable Default Interest Rate will apply and be calculated at the end of each day on the following amounts (unless we’ve agreed otherwise):

• any overdue amount of a Facility Amount Owing;

• any amount overdrawn under an account you have with us; and

• any use of a Facility above a Facility Limit.

The rate applied each day is the applicable Default Interest Rate divided by 365.

Interest at the applicable Default Interest Rate is charged to you on the last Business Day of each month and on the Final Repayment Date for each of your Facilities. Unless paid when charged, the interest will be debited to an account you have with us or added to the Facility Amount Owing. This could mean you have to pay interest on any unpaid interest charged to you.

8. Fees, taxes and Costs

8.1Fees

You agree to pay us each fee, charge, premium or other amount and at the times, specified in the Bank Documents. Unless otherwise stated, these amounts are not charged on a pro-rata basis and once paid, are not refundable.

8.2Taxes and Costs

You agree to pay or reimburse us for all taxes and reasonable Costs incurred from time to time relating to:

• the Bank Documents, the Facilities you have with us and any transactions under them;

• title, security, insolvency and corporate searches concerning you, any Security Provider and all Security assets;

• preparing, registering and maintaining any financing statement or financing change statement (each as defined in the PPS Law) in relation to a Security, or taking any other action that in our reasonable opinion is necessary;

Page 6

• preserving and maintaining the assets and property the subject of the Security (such as by paying insurance, rates or taxes for the property, including any interest, penalties and fines);

• a variation, release or discharge of any Bank Document, or giving a consent or approval or waiving a requirement in connection with a Bank Document;

• us acting or relying in good faith on any notice or other communication from you (or genuinely believed by us to be from you) including any email and any attachment to any email;

• a Default or us exercising or enforcing our rights (or reasonably considering or attempting to do so) under the Bank Documents; and

• the costs or remuneration of, or any amounts payable by us to any External Administrator appointed by us.

8.3You indemnify us

You also indemnify us (and our officers, employees, contractors and agents), and must pay to us on demand amounts equal to any loss, damage or Costs arising as a result of or in connection with:

• any of the payment and reimbursement obligations listed in clause 8.2; and

• us preserving or enforcing our rights (or reasonably considering or attempting to do so) under the Bank Documents.

You don’t have to pay, reimburse or indemnify us:

• to the extent our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our officers, employees, contractors and agents) contributed to the relevant loss, damage or Costs being incurred; and

• if you are a Small Business, to the extent any fraud, negligence or misconduct by an External Administrator appointed by us contributed to the relevant loss, damage or Costs being incurred.

We need not have incurred an expense or made a payment before enforcing a payment, reimbursement obligation or indemnity.

8.4GST

Unless otherwise specified, all amounts referred to in the Bank Documents are exclusive of GST. If we are liable to pay GST or a similar tax on a supply (as defined in relevant GST legislation) made in connection with a Bank Document, you must pay us an additional amount equal to the consideration payable for the supply multiplied by the prevailing GST rate.

9. Promises we rely on

We are relying on some important promises from you to provide the Facilities. These promises are given when you or a Security Provider sign any Bank Document, and again while using a Facility.

9.1Promises about you and the Security Providers

You promise that:

• you hold all necessary approvals, licences, registrations and permits required to run your business;

• the financial information given to us by you and each Security Provider, or on your or a Security Provider’s behalf, gives an accurate and up to date view of your and each Security Provider’s financial positions;

Page 7

• you have not withheld any information from us which might reasonably be expected to affect our decision to provide any Facility to you;

• you don’t have a material dispute with anyone;

• entering into the Bank Documents is for your and each Security Provider’s own commercial benefit;

• you are not Insolvent;

• no Security Provider is Insolvent;

• you have told us about all Defaults you are aware of;

• except as specified in your Business Letter of Offer, you are not a trustee of any trust nor a partner in a partnership;

• signing the Bank Documents and using a Facility will not cause:

o you to breach any law of Australia or elsewhere (including sanctions) or any agreement you have with someone else; or

o any payment obligation you owe to anyone to become due earlier than scheduled;

• you have told us about any Security Interest granted by you or a Security Provider to anyone else;

• you, and each Security Provider, will not remove, sell or dispose of, or grant or permit the creation of, any interest (including a Security Interest) in any property or assets secured under a Security (or try to do so) unless we give our consent;

• you are currently complying with your obligations to us under this Agreement and any other Bank Document; and

• if you have a Specialised Facility or you are not a Small Business, any Financial Covenants are complied with.

9.2Trustee promises

If you enter into a Bank Document as a trustee, your liability to us is supported by you personally, your own assets and the trust assets. You also promise that:

• you are the only trustee of the trust and no steps have been taken to remove you as trustee;

• you have power and authority to enter into the Bank Documents and are doing so in good faith, for a proper purpose and for the benefit of all of the beneficiaries of the trust;

• you have the right to be fully indemnified out of the trust assets for obligations incurred as trustee under the Bank Documents ahead of the beneficiaries’ claims;

• you are not in breach (however described) under the terms of the trust;

• you will not without our prior written consent:

o amend the trust deed;

o cease to be the only trustee; or

o breach your duties as trustee of the trust.

• the trust has not vested or terminated; and

• true copies of the trust documents have been provided and they disclose all the terms of the trust.

9.3Partnership promises

If you enter into a Bank Document as a partner of a partnership, you promise that:

• you have the full power and authority on behalf of the partnership (including under any partnership agreement) to sign and comply with the Bank Documents as a partner to bind the partnership, and doing so is for the proper business of the partnership; and

• true copies of any documented partnership agreements have, if requested by us, been provided by you and they disclose all the terms of the partnership.

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10. Things you wilt do, or not do

We are relying on your agreement to do, or to not do, certain things, as set out in the Bank Documents. This applies for as long as you have a Facility or otherwise owe us any money.

You will:

• keep your business and financial records in good order;

• not significantly change the nature of your business without our consent;

• maintain insurance for your business, assets and premises for a reasonable amount. You will take out more insurance if we ask you to; and

• let us know straight away if you become aware of a Default or if you think one is reasonably likely to occur, or if anything happens which means that any of the promises in clause 9 becomes untrue.

41.1Trustees

If you enter into a Bank Document as a trustee you will:

• give us copies of all of the trust documents we ask for;

• when we ask, exercise your right to be indemnified out of the trust assets to satisfy any liabilities under the Bank Documents; and

• comply with the terms of the trust and ensure that your rights as trustee have priority over the beneficiaries’ interests.

You agree not to do any of the following without our written consent:

• end the trust, or distribute trust assets;

• change the trust terms;

• change the trustee of the trust;

• allow a Security Interest to exist over any trust asset;

• (if the trust is a unit trust) issue units to any person who is not a unit holder on the date of your Business Letter of Offer.

10.2Partnerships

If you enter into a Bank Document as a partner of a partnership, you must make sure that:

• each partner complies with its obligations as a partner of the partnership;

• the partnership’s records are in good order;

• you obtain our written consent before:

o any changes are made to the partners or the terms of the partnership;

o the partnership is terminated, or its property distributed;

o taking action which could make it harder for a partner to comply with a Bank Document; or

o mixing partnership assets with other assets.

10.3Self-managed superannuation funds

If you are a trustee of a self-managed superannuation fund regulated under the Superannuation Laws, you need to comply with those laws.

If you wish to use a Facility to buy an asset, you will need to sign and comply with the terms of a Superannuation Deed in a form acceptable to us.

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Our recourse to your fund will be limited in accordance with the terms of the Superannuation Deed. Please note that the terms of the Superannuation Deed prevail over any inconsistent term in another Bank Document.

Due to the requirements of the Superannuation Laws, despite any other term in a Bank Document you must not redraw any amount you repay under a Facility. The reasons you must not redraw include that your superannuation fund may not comply with the Superannuation Laws if a redraw occurs and there may also be adverse tax consequences for your superannuation fund. We recommend you seek your own independent taxation, legal and financial advice.

If you have used a Facility to buy an asset, you agree to not overdraw your accounts and to pay, or direct your security trustee to pay, us any proceeds received:

• from any insurance claim relating to the asset, before repaying the Facility Amount Owing; and

• if the asset is compulsorily acquired, sold or otherwise disposed of, immediately following receipt.

10.4Co-operation

You will immediately give us any document or information we reasonably ask for and do what we reasonably require to give full effect to the Bank Documents.

11.5What if you don’t comply with your promises?

Even if you are not in Default at the time, if you or a Security Provider don’t comply with promises

or other obligations in a Bank Document, we may contact you and invite you to discuss your situation with us and the options available to assist you to meet your obligations.

If we determine a failure to comply is continuing, and is reasonably likely to have a significant negative impact on:

• you or a Guarantor being able to make any payment due under a Bank Document; or

• our credit or security risk (or our ability to assess these) — for example, our ability to recover any Facility Amount Owing or the value of any Security; or

• our legal or reputation risk,

we may review your Facilities. Any outcome of a review does not affect our rights if later you are in Default. Clause 11 sets out when you are in Default and the consequences.

You must give us all requested information, documents, consents and assistance in connection with a review. Following a review, we may continue to provide the Facilities on the same terms, or we may notify changes we may make under clause 14 or ask you and any Security Provider to vary Bank Documents or to enter new documents with us.

Also, if you are not a Small Business, as a result of a review we may notify you that:

• we no longer wish to continue the Facilities, in which case you will need to pay us the Facility Amount Owing within 90 days (or such later date we advise you); or

• a failure to vary Bank Documents or to enter new documents with us by a certain date will require you to pay us the Facility Amount Owing within a further 90 days (or such later date we advise you), failing which you will need to make that payment.

11.Default

Defaults are events or circumstances (sometimes outside your control) which may impact upon your or a Guarantor’s ability to meet their respective obligations under a Bank Document, or which are outside our credit policies.

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There are two types of Default, and each has different consequences and timeframes before we may become entitled to take Enforcement Action:

• a Payment Default — see clause 11.1; and

• specific events of non-monetary default (referred to as Adverse Events) — see clause 11.2.

If you have an overdraft or on-demand facility the applicable Facility Details or Specific Conditions may also provide that we can require repayment without notice, whether or not there is a Default.

11.1Payment Defaults and consequences

What is a Payment Default?

A Payment Default occurs if you don’t meet all your payment obligations under this Agreement, including those in clause 5.

What are the consequences of a Payment Default?

If a Payment Default occurs you are in Default, but we will give you a notice that a Payment Default has occurred allowing at least 30 days (or 7 days if you are not a Small Business) to remedy it.

However, we may give you a shorter notice period, or no notice period (or if you are not a Small Business, we do not need to give you any notice), if:

• based on our reasonable opinion, it is necessary for us to act to manage an immediate risk, for example, if we became aware that you were attempting to sell any assets or property secured under a Security contrary to the terms of a Bank Document;

• you are Insolvent, or enforcement action is taken against you by us or another credit provider;

• we believe, on reasonable grounds, that you or a Guarantor have not complied with the law or any requirement of a statutory authority; or

• we have already given you a period to remedy an Adverse Event under clause 11.2.

We can immediately take any or all of the Enforcement Actions listed in clause 11.4 where:

• a Payment Default is not remedied within the required notice period set out in any notice given under this clause (or within any longer period we allow);

• we give a notice under this clause but are not required to give a notice period; or

• we are not required to give a notice.

11.2Adverse Events and consequences

What is an Adverse Event?

An Adverse Event occurs if any of the following occurs (whether or not within your control):

• Insolvency:

o you are Insolvent;

o a Guarantor is Insolvent;

• Loss of capacity: you or any Guarantor no longer has legal capacity;

• Creditor enforcement: enforcement proceedings are taken against you or a Guarantor, or your or their assets, by another creditor;

• Cross default:

o early repayment is required under a separate financing arrangement you or a Guarantor has with us, or default based action is taken against you or a Guarantor by us, due to an event of default which is of the same kind as an Adverse Event in this Agreement;

o if you are not a Small Business, you are, or any Guarantor is, in default (however described) under any Security or other document, agreement or arrangement with us;

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• Breach of law: we believe, on reasonable grounds, that you, your agent or a Guarantor have not complied with the law or any requirement of a statutory authority, or it becomes unlawful for you or us to continue with a Facility;

• Misrepresentation: you or a Guarantor gives us information or makes a representation or warranty to us (including any promise made under any Bank Documents) which is materially incorrect or misleading (including by omission);

• Improper use of Facility: you use a Facility for a purpose not approved by us;

• Improper dealings with assets: without our consent, your assets or a Guarantor’s assets are dealt with, or attempted to be dealt with in breach of this Agreement, any Security or any other agreement with us;

• Failure to provide financial information: you or a Guarantor do not provide financial information required by any Bank Documents;

• Failure to maintain licence or permit: you or a Guarantor do not maintain a licence or permit necessary to conduct your respective businesses;

• Failure to maintain insurance: you or a Guarantor do not maintain insurance required by any Bank Documents. This includes, for example, where the insurance becomes unenforceable because of any action or inaction by you;

• Change of control: without our consent, there is a change in the legal or beneficial ownership, or management control of you or a Guarantor, or of your or a Guarantor’s business;

• Change of status, capacity or composition: without our consent, there is a change in the status, capacity or composition of you or a Guarantor; and

• Specialised Facilities and Financial Covenants: if you have a Specialised Facility, or you are not a Small Business:

o any ‘Financial Covenant’ specified in this Agreement is not complied with; or

o an event or circumstance specified in this Agreement as an ‘Adverse Event’ occurs.

If you are not a Small Business, then references to “Guarantor” above are read as references to “Security Provider”.

What are the consequences of an Adverse Event?

If an Adverse Event occurs, then you are in Default.

You must promptly give us any information we ask for concerning an Adverse Event.

If an Adverse Event has occurred which by its nature is material, or we reasonably consider has had, or is likely to have a significant negative impact on:

• you or a Guarantor being able to make any payment due to us under any Bank Document;

• our credit or security risk (or our ability to assess these) — for example, our ability to recover any Facility Amount Owing or the value of any Security; or

• our legal or reputation risk where the Adverse Event is one described above under ‘Breach of law’, ‘Misrepresentation’ or ‘Improper use of a Facility’,

then we may issue a notice (“Adverse Event Notice”).

An Adverse Event Notice will allow you at least 30 days to remedy the Adverse Event (if it can be remedied) or to submit to us a plan to resolve the Adverse Event to our satisfaction.

If, after the period specified in the Adverse Event Notice:

• the Adverse Event has not been remedied to our satisfaction; or

• your plan to resolve the Adverse Event was not satisfactory to us,

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then we may give you a further notice that the Adverse Event has not been remedied and allowing at least 7 days (or a longer period required by law) to remedy the Adverse Event. However, we may give you shorter notice periods than those described above or no notice periods (or if you are not a Small Business, no notices), in relation to an Adverse Event where, based on our reasonable opinion, it is necessary for us to act to manage an immediate risk, for example, if we became aware that you were attempting to sell any assets or property secured under a Security contrary to the terms of a Bank Document.

We can immediately take any or all of the Enforcement Actions listed in clause 11.4 where:

• an Adverse Event is not remedied within the required notice period set out in any notice given under this clause (or within any longer period we allow); or

• we give a notice under this clause but we are not required to give a notice period; or

• where we are not required to give a notice.

If an Adverse Event is not material or does not have the impact as described above, then we may ask for further information, but we will not take any further action.

11.3What if another Default occurs during the remedy period?

Even if you remedy a Default during the applicable remedy period specified in a notice, we may still take Enforcement Action if another Default of the same type has arisen during that period.

11.4Enforcement Actions

After any applicable steps and time periods described above, when you are in Default we can take any or all of the following Enforcement Actions:

• by notice to you, make any Facility Amount Owing immediately due and payable without the need to give any further notice other than as required by law;

• by notice to you, cancel the Facilities with immediate effect;

• by notice to you, cancel or reduce all or any part of a Facility Limit (or if applicable, a component limit) with immediate effect;

• close out any treasury transactions we have entered into in relation to a Facility (such as hedging, money market or currency transactions) and set-off any resulting amounts we owe you against any Facility Amount Owing;

• continue to charge interest at the applicable Default Interest Rate on any overdue amounts (including interest);

• at our discretion, apply amounts we receive in respect of any Facility Amount Owing to any part of the Facility Amount Owing which you are then obliged to pay. We may do so even if you ask or direct us otherwise, but we will act reasonably in the circumstances and in accordance with the law;

• sue you for any Facility Amount Owing; and

• enforce any Security.

11.5Concurrent notices

We, or an External Administrator, may give you any other notice that is required by law in connection
with enforcing a Security Interest at the same time as we give you a notice under this clause 11.

11.6Appointment of consultants

We may appoint a consultant at any time to investigate and report to us on your or a Guarantor’s
business, and on compliance of any party with the Bank Documents.

If, based on what we know or suspect, we think a Default exists or is likely to exist in future you
will, if we ask, pay our reasonable Costs in relation to the consultant, or appoint a consultant we

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nominate or approve on terms acceptable to us. We can charge all related Costs that you have to pay to any of your accounts.

You will help us and the consultant as soon as you are asked to.

Where you have paid the Costs of the consultant, we will (unless the consultant is a lawyer) give you a copy of our instructions to the consultant and extracts of their report in accordance with industry guidelines published by the Australian Bankers Association Inc.

Investigated parties are not required to adopt any recommendation, but if they do we are not responsible for it.

11.7Set-off and combining your accounts

We may at any time:

• combine and amalgamate any two or more accounts held by you (or an account conducted by us in your name) with us;

• set off or transfer any credit balance on any such account towards satisfaction of any amounts due and owing by you to us (whether alone or with any other person); and

• do anything reasonably necessary to enable us to do this, such as converting currency using our exchange rate.

However, if you are a Small Business, we will not exercise these rights unless either we give you notice or there is a Default. Otherwise, we will notify you after exercising these rights.

12. Change in law, anti-money laundering, counter-terrorism financing and sanctions

12.1Consequences of a change in law

If the law changes and we reasonably believe that it will be against the law for us to provide or continue to provide a Facility to you, we will:

• let you know as soon as we can; and

• work with you to ensure the law is being complied with.

If we are required by law to ask you to pay back some or all of the amounts you owe us we will give you as much notice as the law allows.

12.2Increased costs or reduced amounts received

If any law or prudential standards, policies or requirements applying to us changes and we reasonably believe that there will be:

• a material increase in the cost to us of providing or maintaining the Facilities; or

• a material reduction in the effective return or amount we are able to receive in relation to a Facility,

then we will let you know as soon as we can and try to eliminate or reduce the amount of the adverse impact on us.

To the extent that we cannot eliminate or reduce the amount of the adverse impact you must compensate us for that amount.

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12.3Anti-money laundering, counter-terrorism financing and sanctions

You must comply, and must ensure each Security Provider complies, with all applicable

requirements relating to anti-money laundering, counter-terrorism financing or sanctions.

We may take, or avoid taking, any action (for example, we may delay, block or refuse to process any payment or other transaction) if in our reasonable opinion to do otherwise may:

• breach any law of Australia or elsewhere (including any sanctions); or

• result in a fine being imposed on, or any other regulatory action being taken against, us, any of our subsidiaries, any body corporate that is directly or indirectly related to us, or any entity with whom we have entered into arrangements in connection with any services provided under the Facilities.

12.4Regulatory events

From time to time, our ability to provide the Facilities to you may be interrupted, prevented, delayed or otherwise adversely affected by regulatory events such as the application of anti-money laundering or counter-terrorism financing laws or sanctions, changes in law or prudential standards, policies or requirements applying to us, or by the actions of a regulatory authority.

If you are affected by, or suffer a loss due to a regulatory event, we, our subsidiaries and related bodies corporate are not liable and are not required to challenge or mitigate the effect of the regulatory event on you or on us.

If we are liable, our liability is limited to re-supplying the Facilities to the extent that we are able to and are allowed to by law.

You agree that we can share information with other financial institutions and regulatory

authorities about you, the Facilities, a regulatory event or another person connected with any of them.

If we ask, you agree to promptly provide us with any document or information about yourself, the Facilities or any person connected with you or the Facilities and to help us manage risk, comply with our obligations or obtain any consent we need.

13. Our security

13.1Valuations

At any time we reasonably require we may instruct a valuer to value any Security and any property that is the subject of any Security. A valuation may be obtained in order to assess:

• the value of assets the subject of a Security or proposed Security;

• our credit and security position for existing or prospective Facilities; or

• compliance with Financial Covenants (where applicable) or any other conditions in this Agreement, or for any other purpose we tell you about

You agree to:

• co-operate with the valuer;

• pay when asked any fees and charges in connection with the valuation; and

• comply with every reasonable request to provide assistance to the valuer including providing authorisations, relevant information, records, access to individuals, premises and business equipment used in the conduct of your business.

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Unless we have commenced enforcement proceedings (as defined in the Banking Code), where you have paid (or reimbursed us) for a valuation of commercial or agricultural real property, we will provide you with a copy of that valuation and the instruction to our valuer. We may require you to acknowledge in writing that you accept our reasonable limitations on your use of the valuation before we provide it to you. We will also give you the benefit of any additional rights you have under the Banking Code to receive valuation information from us.

Please note that we and the valuer are not responsible or liable to you or any Security Provider for the contents of a valuation.

13.2Protecting our security position

If we think that a PPS Law:

• applies or will apply to, or in connection with, a Bank Document; and

• does, or may adversely affect our security position, our rights or obligations in connection with a Bank Document,

we may ask you and you will help us immediately at any time including by:

• providing us with all information we request and taking all actions to help us perfect the Security;

• amending any Bank Document or executing any new Bank Document; and

• to continuously, or as and when we require you to, perfect any Security so it has priority and protection from loss, termination and diminution.

13.3Personal property security policies and steps

You will promptly take all reasonable steps which are prudent for your business in connection with the PPS Law, such as registering any Security Interests you receive in the ordinary course of your business. Where appropriate or when we ask you to, you will identify, protect and achieve the highest priority reasonably available for your Security Interests.

13.4Change of details

You must notify us in writing at least 14 days before:

• you or any Security Provider, trust or partnership changes its name;

• any ABN, ACN, ARBN or ARSN allocated to you or any Security Provider, trust or partnership changes, is cancelled or ceases to apply to it (or if it does not have an ABN, ARBN or ARSN, one is allocated, or otherwise starts to apply to it); or

• you or any Security Provider becomes trustee of a trust, or a partner of a partnership not stated in your Business Letter of Offer.

13.5PPS Law waiver

You waive, to the extent permitted under the PPS Law, your right to receive any notices we are required to give under the PPS Law.

13.6PPS Law disclosure

You agree not to disclose or authorise the disclosure to any person any information of the kind described in section 275(1) of the PPS Law or to waive your duty of confidence to us.

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14. Changes we may make

We may need to make changes to your Facilities from time to time. We may make some changes without your consent, some changes occur automatically and some changes require your agreement. We promise to act reasonably when we make any changes.

14.1Types of changes we may make

We may make the following types of changes without your consent:

• introduce a new fee, charge or premium;

• change the amount of a fee, charge or premium, how it is calculated or when it is charged;

• change a rate (other than a fixed rate) or the Default Interest Rate, including by changing or replacing the relevant indicator rate or a component used in determining a rate, or by changing, adding or removing a margin (including by making a margin positive or negative);

• change your repayment obligations, including the amount of or timing for any repayment, or your repayment type;

• change the frequency with which interest is debited or credited; and

• make necessary changes due to a change in law, to comply with or our prudential obligations as a bank, or as required by the Banking Code.

Any other changes to a Bank Document will need your agreement.

14.2When we will notify you of changes we make

We will give you at least 30 days’ notice of a change we make, except as follows:

• If we change an interest rate, including any indicator rate, we will comply with the notice requirements in the Banking Code and tell you no later than the date of the change — unless we are not able to because the interest rate is calculated according to a money market or other external reference rate, or a rate otherwise designated as a variable or floating rate.

• If we reasonably consider a change (other than a change to interest rates) will be unfavourable to you and the same change is not being made to similar facilities of our other small business customers, we will give you at least g0 days’ prior written notice of the change (however, we may give you a shorter notice period, if we believe doing so is necessary for us to avoid, or to reduce, a material increase in our credit risk.

• If there is a change to, or introduction of a government charge that you pay under your Facility, we will tell you about it reasonably promptly (however, we do not have to notify you if it is publicised by the government).

• If there is a change that reduces your obligations (for example, a reduction in a rate or fee), we may give you a shorter notice period, or no notice period, if not inconsistent with the Banking Code. However, we will give particulars of any such change as soon as reasonably possible, even if this is after the change takes effect.

• If repayment amounts have changed as a result of a change in a variable rate (for example a
Business Options Loan where a variable rate applies), we may not provide notice of the
change in repayment amount. A change in repayment amounts as a result of a change in a
variable rate may not happen immediately, but will generally occur up to 12 months after a
variable rate change. In cases where a variable rate has changed but the repayment amount
has yet to be re-calculated to reflect the rate change, the portion of your repayment amount
allocated to paying down your principal may change until such time the repayment amount has
been re-calculated. For example:

o If the variable rate goes up, your repayment amount will generally go up in the
12 month period after the rate changes. Until that happens, your total repayment
amount will not change, but the breakdown of your interest and principal

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repayments will - the portion of your repayment amount allocated to paying down your principal will go down (and you will pay more interest).

o If the variable rate goes down, your repayment amount will generally go down in the 12 month period after the rate changes. Until that happens, your total repayment amount will not change, but the breakdown of your interest and principal repayments will — the portion of your repayment amount allocated to paying down your principal will go up (and you will pay less interest).

If you require more information about your repayments, or want to change your total repayment amount (for example, if you want to increase your repayment amount so that you are paying the same amount of principal when interest rates go up), please contact us.

14.3How we will tell you about changes we make

We will notify you of changes we make by either writing to you or putting an advertisement in national or local media.

14.4What you can do if you don’t like a change

If you don’t agree with a change we make or are proposing to make, you may terminate the Facilities by notifying us in writing and repaying us each Facility Amount Owing. Economic Costs may be payable (see clause 15).

15. Economic Costs and benefits

An ‘Economic Event’ occurs if all or part of a Facility is being re-priced by agreement, or becomes payable or is cancelled, repaid or discharged early for any reason (including following a Default).

There are no early termination fees on your Facilities under this Business Letter of Offer. However, if an Economic Event occurs, we may need to liquidate funds or deposits or terminate, reverse or vary an agreement, arrangement or transaction we entered into to hedge, fix or limit our effective cost of funding or maintaining all or part of a Facility. In that case, we will determine and advise you of any resulting Economic Costs to us, or whether there is a benefit to you of any net amount of returns and gains obtained by us, including because of any changes in rates applicable to a Facility (all other things being equal).

You must pay us the amount of any advised Economic Costs, and if applicable to your Facility, we will pay you the amount of any net returns and gains we obtain.

Please note that the amount of Economic Costs you may need to pay following an Economic Event can be significant, and will increase the Facility Amount Owing.

16. Communications

16.1How we will communicate

Notices, statements, certificates and other communications from us can be:

• given to you personally;

• left at or posted to your address last nominated by you;

• sent by facsimile to your fax number last nominated by you;

• given to you by notifying you through an electronic service provided by us that information is available electronically;

• published in the press or at nab.com.au; or

• given to you electronically by:

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o short message service (SMS) to your mobile telephone number or email; or

o notifying you by short message service (SMS), or by email, of information on our website.

We will use your last nominated mobile number or email address for notices. You may change your nominated email address or mobile number, by giving us notice or calling us on 13 10 12. On request, we will provide you with paper copies of any notices or communications sent to you (seven years from the time the information is given). You must check your email and mobile phone regularly.

Your Specific Conditions also may specify how we will communicate some types of information to you.

If we send a document or communication to you by ordinary post, you are taken to have received it 7 Business Days after it was posted.

A document or communication sent by facsimile is received by you at the time and date shown on the delivery receipt.

A document or communication sent by another form of electronic communication (such as SMS or electronic mail) is taken to be received when it enters your information system as recipient.

A document or communication published in the press or on the internet is taken to be received by you when it is first published.

16.2Communications from you

Written communications from you must be signed (including electronically) by you (or by a director or another person we have approved in the case of a company or another entity).

16.3Telephone recording

We may record some conversations with you. We will notify you before we do so or use the recording for any external purpose.

16.4Contacting us for further information

For further information call 13 10 12 or visit nab.com.au.

17. Interpretation, assignment and confidentiality

17.1How this document is to be understood

We have tried to make the Bank Documents fair and reasonable. However, if any Law applies to make part of a Bank Document inoperative then the intention is for it to be interpreted in a way which preserves as much of the Bank Document and its operative effect as the law allows.

17.2Applicable law

This document is governed by the laws of the state or territory where the office issuing this document is located. You agree to any court dispute being conducted in the courts of that place.

17.3Assignment

We may assign or otherwise deal with our rights under the Bank Documents in any way we
consider appropriate (subject to the Banking Code if you are a small business),If we do so, you
agree to help us including by signing any document or providing consent. We may disclose any

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information or document to do so. You cannot assign your rights under the Bank Documents without our prior written consent.

17.4Confidentiality

We and you agree to keep any information provided to each other and the Bank Documents confidential. We and you will only disclose that information:

• to our respective officers, employees, legal and other advisers and auditors;

• to an External Administrator;

• to third parties with the consent of the other party (such consent not to be unreasonably withheld);

• if required by the rules of any relevant financial market or if allowed or required by law; or

• if there is a regulatory event (as described in clause 12).

We may also disclose that information:

• if we are assigning or otherwise dealing with our interest under any of the Bank Documents or proposing to do so;

• to register or maintain our Security;

• to enforce our rights under any of the Bank Documents; or

• to any Security Provider(or to a person we believe may become a Security Provider), but on the same confidential basis set out above.

17.5Law and legislation

Unless the context requires otherwise, a reference in the Bank Documents to legislation or other law or a provision of them includes regulations and other instruments under them, and any consolidation, amendment, re-enactment or replacement.

18. Meaning of words

The meanings of some words used in your Business Letter of Offer and these Business Lending General Terms are set out below, or may otherwise be explained in your Business Letter of Offer.

Adverse Event has the meaning given in clause 11.

this Agreement means the agreement between you and us in relation to the Facilities, as set out in the applicable Bank Documents.

Bank Documents means:

• your Business Letter of Offer;

• the documents listed at the start of that letter (including this Agreement, these Business Lending General Terms, Specific Conditions and the Business Banking Fees: A Guide to Fees and Charges);

• any Security; and

• any other document, agreement or arrangement you have with us from time to time.

Banking Code means:

• if the parties enter into this Agreement prior to 1 July 2019, the Code of Banking Practice (2013); or

• if the parties enter into this Agreement on or after 1 July 2019, the Banking Code of Practice (2019).

Banking Day means a day from Monday to Friday on which we are open for business in Sydney.

Business Day means a day from Monday to Friday on which we are open for business in at least one of our branch locations in Australia.

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Corporations Act means the Corporations Act 2001 (Cth).

Costs means our costs, charges, fees, expenses and other outgoings. This includes where we appoint advisers, lawyers or professional consultants and the reasonable expenses incurred by our staff and for the use of our operations, premises and resources.

Default has the meaning in clause 11.

Default Interest Rate means, in respect of a Facility or an overdrawn account as described in clause 6, the rate specified in the Facility Details, and if no rate is specified the default rate (however described) applicable to the nominated or linked account required in connection with the Facility.

Drawdown Notice means a notice requesting use of a Facility, or otherwise giving instructions in relation to a Facility, in a form and substance acceptable to us.

Economic Costs means any Costs and losses following an Economic Event.

Economic Event has the meaning given in clause 15.

Enforcement Action has the meaning in clause 11.4.

External Administrator means a receiver, receiver and manager, administrator, liquidator, provisional liquidator, controller or bankruptcy trustee.

Facility means any bank product we agree to provide to you under your Business Letter of Offer.

Facility Amount Owing means all money which you (whether alone or not) are, or at any time may be, liable to pay us under, or in connection with, a Facility.

Facility Details means the details for each Facility in your Business Letter of Offer.

Facility Limit means a financial limit for use of a Facility or a component of a Facility, as set out in the Facility Details.

Financial Covenant means a covenant specified in this Agreement which requires you to comply with, or report on, specified financial parameters, typically measured against your financial results in your financial statements. If you are:

• a Small Business, you may need to report on Financial Covenants to help us monitor our credit and security position, as set out in your Business Letter of Offer; and

• not a Small Business or you have a Specialised Facility, you must comply with a Financial Covenant specified in this Agreement, as noted in clause 9.1.

Final Repayment Date means, in respect of a Facility, the earlier of:

• the Facility Expiry Date(if any) specified in the Facility Details, or a later date as notified by us to you in writing;

• the date the Facility Limit is cancelled; or

• the date the Facility is terminated or otherwise ends,

or if that day is not a Business Day, the next Business Day (unless otherwise stated in the Specific Conditions for that Facility or unless otherwise agreed).

GST means goods and services tax as imposed under the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Guarantor means any person who provides a guarantee to us.

A person is Insolvent if:

• they are (or state they are) insolvent or an insolvent under administration (each as defined in the Corporations Act);

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• they have an External Administrator appointed to them or any of their assets, are in liquidation, in provisional liquidation, under administration or being wound up;

• execution, distress, or any other process is attempted or imposed regarding any of their undertaking, property or assets;

• a compromise, arrangement, assignment, moratorium or composition is proposed with, or becomes effective in relation to, their creditors or any class of their creditors (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by us);

• an application or order has been made (and, in the case of an application, it is not stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put forward, or any other action taken, in each case in connection with them, which is preparatory to or could result in any of the things referred to above;

• they are taken (under section 459F of the Corporations Act) to have failed to comply with a statutory demand;

• they are the subject of an event described in section 459C(2)(b) or section 585 of the Corporations Act;

• they are a natural person who commits an act of bankruptcy within the meaning of the Bankruptcy Act 1966 (Cth);

• they are otherwise unable to pay their debts when they fall due; or

• something having a substantially similar effect to any of the things referred to above happens in connection with them under any law.

Our, We and Us means National Australia Bank Limited ABN 12 004 044 937 and its successors and assigns. Sometimes we refer to ourselves as NAB.

Payment Defaults are described in clause 11.

PPS Law means the Personal Property Securities Act 2009 (Cth).

Security means the ‘Security’ specified in your Business Letter of Offer or any Facility Details, and any other Security Interest granted to or held by us from time to time in connection with a Facility or any Facility Amount Owing.

Security Interest means a document or act creating a security for the payment of money or performance of an obligation. This includes a ‘security interest’ as defined in the PPS Law, and any general security, specific security, mortgage, charge, lien, pledge, guarantee, title retention, right of set—off, assignment of income, garnishee order or monetary claim and flawed deposit arrangements.

Security Provider means a Guarantor and any other person who provides a Security to us.

You are a Small Business, when the total of our business finance credit exposures to you and your related entities (that are businesses) is less than $5,000,000. This includes the total of all your existing debt to us, any undrawn amounts in relation to that debt, and any other credit or financial accommodation provided or being applied for. Your ‘related entities’ are those which fall within the definition of ‘related entity’ under section 9 of the Corporations Act and could include, for example, those entities which we reasonably determine are under common ownership control or management control with you or by you. We may make any such determinations under our aggregate risk exposure policies.

Specialised Facility means a Facility:

• used to fund property development; or

• used to fund a specialised lending transaction, which because of its nature, requires additional covenants to help us manage our risks, including margin lending, loans to self-managed superannuation funds, bailment, invoice discounting, construction finance, foreign currency loans and tailored cash flow lending.

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Specific Conditions — these are set out for each Facility in your Business Letter of Offer.

Superannuation Deed means a superannuation acquisition financing deed or superannuation financing deed (see clause 10.3).

Superannuation Laws means the Superannuation Industry (Supervision) Act 1993 (Cth).

You means each person identified as “you” in this Agreement and, if there is more than one person, means each person separately and every two or more jointly. It also includes your successors, and if you are a partnership, it includes the partnership as reconstituted from time to time (for example after admission, retirement, death or incapacity of a partner).

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EX-10.30

Exhibit 10.30

Date: 17/02/2020

BUSINESS LETTER OF OFFER

National Australia Bank Limited

and

Pasture Genetics Pty Ltd ACN/ARBN/ABN 074 290 252

“you”

Your Business Lending Facilities with NAB and why this matters The aggregate of our business finance credit exposures to you and your related (business) entities is used to determine if you are a Small Business. The Banking Code applies to our relationship with you if you are a small business as defined in the Banking Code. However, we will also treat you as a Small Business, and therefore apply the Banking Code, when the total of our business finance credit exposures to you and your related (business) entities is less than $5,000,000. The total sum of credit exposures in this Agreement and in your other business facilities listed below is $10,000,000.00. We may also have other business finance credit exposures to your related (business) entities under separate agreements. These need to be taken into account to determine whether you are a Small Business for the purposes of this Agreement.
Facility Type	Limit
TRADE FINANCE	$10,000,000.00

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 1

YOUR NAB BUSINESS FACILITY AT A GLANCE

Trade Refinance Facility The Global Trade Finance Specific Conditions apply to this Facility.
Facility Details
The purpose of your Facility:	Working Capital
Facility Limit:	$10,000,000.00
Your Nominated Account at NAB:	To be advised Your Nominated Account will be debited with all fees and charges payable under this Facility unless you make separate arrangements with us.
Facility Expiry Date:	31/03/2022
Term of Drawings:	30 days. You can propose the term of each utilisation which may be for a period of up to 30 days (or any other period that we permit at our discretion), provided that the term is consistent with your trading terms.
Interest Rate (Australian Dollar):	The interest rate for a drawing denominated in Australian Dollars is fixed at the time of that drawing and will be our Australian Trade Refinance (ATR) Rate quoted by us at the time of drawing plus a Customer Margin.
Payment of interest:	Payable in arrears.
ATR Indicator Rate:	2.7100% per annum currently.
Customer Margin:	1.5000% per annum. This is a customer risk margin determined through our assessment of your financial situation.
Facility Fee:	1.0000% per annum of the Facility Limit calculated on a 365 day basis payable in advance. The first such fee will be payable on a pro-rata basis, on the date of this Agreement, with subsequent fees being payable in full on the last Business Day of each quarter and upon cancellation of the Facility.
Application Fee:	$35,000.00 payable by you on your acceptance of this Agreement.
Trade and Invoice Finance Transaction Fees:	Our standard fees and charges as detailed in our booklet: Business Banking Fees - A Guide to Fees and Charges in connection with this Facility will apply to all transactions under this Facility. Non-standard fees and charges will be advised to you.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 2

Default Interest Rate (Foreign Currency):	The default interest rate for a drawing denominated in a foreign currency is fixed at the time of that drawing and will be calculated as the Interest rate (Foreign Currency) plus a Default Margin of 1.00% per annum.
Default Interest Rate (Australian Dollar):	5.2100% per annum currently. The default interest rate for a drawing denominated in Australian Dollars is fixed at the time of that drawing and will be calculated as the Interest Rate (Australian Dollar) plus a Default Margin of 1.00% per annum.
Other Important Facility Information
Facility Specific Security:	Not Applicable

Here’s what we promise to do

Always act fairly and reasonably keeping in mind your and our respective business interests.

Doing the right thing is important to us. That’s why we’ve adopted the Banking Code, which sets the standards of practice and service for banks.

We commit to the term of the Facility which we have negotiated with you in this Agreement.

We commit to notifying you of any changes we make to this Agreement.

We commit to allowing you to terminate this Agreement at any time. We won’t charge you an exit fee but some facilities may have costs to unwind your funding arrangements or may require you to give us prior notice.

We commit to giving you any information you require to better understand this Agreement or your Facility with us.

We have laws in Australia to protect small businesses from unfair contract terms. NAB is committed to this contract being fair.

Getting started

Before the Facility/ies is provided you’ll need to meet the following conditions. These Conditions Precedent are in addition to any other conditions precedent set out elsewhere in this Agreement.

•Prior to settlement the following is to be completed: - Right of entry for Wingfield and Penfield locations, together with any third party seed storage sites. - Debtor insurance policy is to be provided. - Trade Finance initial field examination is to be completed.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 3

Promises we rely on

•It’s important that you meet the obligations in the additional covenants and undertakings detailed below at all times during this Agreement. Please contact us if you’re worried about not meeting these so we can provide early assistance.

•If there are any inconsistencies between these additional covenants and undertakings and the Business Lending General Terms or Facility Specific Conditions, these additional covenants and undertakings prevail to the extent of the inconsistency.

•These additional covenants and undertakings are to be assessed and reported as detailed below.

•Borrowing Base Facility Inventory ‘Agreed Selling Price’ for stock value calculation is to be confirmed annually by the Bank by 31 March each year.

•Minimum capital adequacy of 30.00% as measured on a daily basis and reported in relation to the 12-month period ending on 31st December annually for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd. To be reported on by the 15th February annually via the December quarterly management reports. Capital adequacy being tangible net worth + Intercompany loans from S&W divided by total tangible assets.

•Within 45 days of the close of each quarter a Statutory Payment Certificate to be completed by you and signed by one or two of your directors or authorised representatives as appropriate, detailing as at the end of the reporting period that statutory payments are current for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Within 45 days of the close of each quarter, a copy of the quarterly actual to projected cash flow reports to be provided with commentary on all variances greater than 10% for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Stock harvested in prior calendar year is to be excluded from Borrowing Base Facility approved inventory from 31 December of the calendar year following harvest.

•Within 155 days of the close of each financial year, a copy of the unaudited annual report or balance sheet, profit & loss account for the ensuing year for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Within 45 days of the close of each quarter, a copy of your quarterly management accounts including balance sheet, profit & loss account, and cash flow statement for the consolidated position for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd.

•Minimum interest cover of 1.25 times (Earnings Before Interest, Tax Depreciation and Amortisation (EBITDA) / Total Interest Expense) as measured for the 12 month period ending on 30th June annually for S&W Seed Company Australia Pty Ltd & Pasture Genetics Pty Ltd special purpose management report.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 4

Your assets / premises to be used as security for the Facility

•The Securities listed below secure all new Facilities in this Agreement.

•In the future, you may agree in writing to further securities being provided.

•If you have any earlier Securities in place with NAB, these will remain in place and will not be detrimentally affected by these new Securities.

Description

Security Interest and Charge over all of the present and future rights, property and undertaking of Pasture Genetics Pty Ltd ACN 074 290 252.

Right of Entry given by Pasture Genetics Pty Ltd ACN 074 290 252.

Right of Entry given by Pasture Genetics Pty Ltd ACN 074 290 252.

Guarantee and Indemnity for $10,000,000.00 given by S&W Seed Company Australia Pty Ltd ACN 061 114 814 supported by:

Security Interest and Charge over all of the present and future rights, property and undertaking of S&W Seed Company Australia Pty Ltd ACN 061 114 814.

Registered Mortgage over property situated at 4 & 5 Stirling Road Keith SA more particularly described in Certificates of Title Register Book Volume 6186 Folios 122 and 123.

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GENERAL FEES AND CHARGES

Our estimate of your upfront fees and charges

We want to be transparent about your fees and charges, so you’re clear about what you’re paying. There are a number of fees you need to pay as soon as you sign this Agreement. These are set out below. For more information, read the enclosed document: Business Banking Fees: A Guide to Fees and Charges.

NB: This is only an estimate. There may be extra fees and charges for your Facility. If this is the case, we’ll let you know as soon as possible.

Estimate of NAB’s credit fees and chargesApplication fee$ 35,000.00This application fee is the total application fee payable under this Agreement. It includes any separate facility application fees set out in the Facility Details.Company search fee$ 40.00GSA Registration$ 115.00Estimate of total amount of NAB’s credit fees and charges$ 35,155.00 Estimate of non-NAB fees and charges(payable to the relevant government department and payable to third parties)Estimate of total amount of non-NAB fees and charges$0.00 Estimate of total amount of all fees and charges (as far as can be ascertained now).$ 35,155.00

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Here are some important things you should know This is a summary of some important things you should know. Please read through the Business Lending General Terms for the full terms.
Who to contact if things go wrong?	You agree to tell us straight away about any changes to your business or other events which may impact on your ability to meet your obligations to us. If you’re experiencing financial hardship you can contact your banker or you can call NAB Assist on 1300 135 323 or Customer Care Small Business on 1300 961 577.
When will a Default occur?	Payment Default:	You will be in Default if you do not pay on time any amount due.
	Defaults due to Adverse Events:	Even if payments are made on time, you will also be in Default if specific other events occur, including •you are Insolvent •a Guarantor is Insolvent •you or a Guarantor have not complied with the law, lose capacity or give us misleading information •creditor enforcement occurs •use of facility for an unapproved purpose •unauthorised sale or disposal of assets that form part of the Security •change of control (not applicable if you are an individual) •loss of licence, permit or other authorisation •failure to maintain insurance •any event specified as an “Adverse Event” in your Business Letter of Offer (Not all Adverse Events will lead to enforcement — see the Business Lending General Terms for more information)
When can NAB enforce?	Usually we will give you notice of a Default and an opportunity to remedy it. But sometimes we can enforce immediately when there is a Default, including when urgent action is needed to protect or take control of assets that form part of the Security — see the Business Lending General Terms for more information.
Can NAB increase costs?	•From time to time we may increase costs payable by you. For example we may introduce a new fee, charge or premium for services we provide to you. •Also, if the law or other rules applying to us as a bank change we may need to increase costs payable by you; •We will give you at least 30 days’ notice of any increased cost. If you’re not happy with the increased cost you can repay us and exit this Agreement. •See the Business Lending General Terms for full details about when we might increase our costs and how to exit if you’re not happy.
How can NAB change the terms of the Agreement?	We promise to act reasonably when we make any changes. Types of changes we can make include: •Introducing a new fee, charge or premium or changing the amount of a fee or way it’s calculated. •changing an interest rate (other than a fixed rate); •Changing a term of this Agreement to comply with relevant laws, industry code or our prudential obligations; and •Changing your repayment obligations. We will notify you of changes we make by either writing to you or putting an advertisement in national or local media.
What you can do if you don’t like a change?	If you’re not happy with a change we’ve made or are going to make you can repay us and exit this Agreement. Economic Costs may be payable if you exit early (but we won’t charge you an exit fee).See the Business Lending General Terms for full details about changes we can make and how to exit if you’re not happy.

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 7

FACILITY ACCEPTANCE

The laws of South australia apply when interpreting this Agreement.

Your Acceptance Of Our Offer

I/we accept NAB’s offer as set out in this Agreement.

Further, I/we:

1.declare that all the information I/we have given NAB is accurate and not misleading

2.acknowledge that I/we have read the Bank Documents, including this Agreement, the relevant Specific Conditions to this Facility and the Business Lending General Terms

3.acknowledge that the assets I/we (or a Security Provider) have put up as security for this Facility will be at risk if I/we do not repay our Facility or otherwise Default; and

4.understand that NAB may pay a commission to a third party where I/we have been introduced to NAB by that third party.

Declaration of purpose

I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for:

•business purposes; or

•investment purpose other than investment in residential property.

IMPORTANTYou should only sign this declaration if this loan is wholly or predominantly for:•business purposes; or•investment purposes other than investment in residential property.By signing this declaration you may lose your protection under the National Credit Code.

Each party may sign a separate copy of this document. Each signed copy is an original of this document and all copies together will constitute one agreement.

Executed by the customer

Pasture Genetics Pty Ltd ACN 074 290 252

Customer Company Name (BLOCK LETTERS)

Executed by the company named above in accordance with Section 127 of the Corporations Act 2001 (Cwlth)

/s/ Ann Elizabeth Damin
Signature	Signature
Ann Elizabeth Damin
Full name (BLOCK LETTERS)	Full name (BLOCK LETTERS)
Director / Secretary*	Director
Office Held	Office Held
Date	Date

* Please tick here if you are signing as Sole Director and Sole Company Secretary

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 8

SPECIFIC CONDITIONS TO YOUR FACILITY

Global Trade Finance

HOW THESE FACILITIES WORK

We want to support your business.

Global Trade Finance comprises different types of Facilities which could include:

•a Foreign Currency Overdraft Facility

•a Documentary Letter of Credit Facility

•a Documentary Letter of Credit and/or Documents Surrendered Facility

•a Standby Letter of Credit Facility

•a Trade Refinance Facility, or

•an Overseas Bills Purchased Facility.

The Facility Details of the particular Facilities available to you are set out in your Business Letter of Offer. Facility Limits are set in Australian Dollars unless your Facility Details say otherwise.

These Specific Conditions cover all of the Facilities listed above, so you should read the relevant conditions applicable to your Facilities as follows:

•Clause 1 (Getting Started) — This applies for every type of Global Trade Finance Facility.

•Clause 2 (Foreign Currency Overdraft Facilities) — This applies only to a Foreign Currency Overdraft Facility.

•Clause 3 (Letter of Credit Facilities) — This applies only to a Documentary Letter of Credit Facility, Documentary Letter of Credit and/or Documents Surrendered Facility, or Standby Letter of Credit Facility.

•Clause 4 (Trade Refinance Facility or Overseas Bills Purchased Facility) — This applies only to a Trade Refinance Facility, or Overseas Bills Purchased Facility.

•Clauses 5 to 8 (General) — These apply for every type of Global Trade Finance Facility, except where specified otherwise.

Except for the Foreign Currency Overdraft Facility, the Global Trade finance Facilities are generally not repayable upon demand except on the Final Repayment Date or when a Default has occurred and we are entitled to take Enforcement Action.

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FOREIGN CURRENCY WARNING NOTICE•This important notice should be read and understood before you decide to enter into a Facility or transaction in a foreign currency.•This notice is intended to provide you with a general warning of the risks that can arise from adverse exchange rate movements when transacting in a foreign currency, and to advise you that other risks also exist.•Your liability in Australian Dollars will increase, possibly very substantially, if there is an adverse movement in either:(a)the Australian Dollar relative to the currency of the foreign currency facility or transaction; or(b)the foreign currency relative to the Australian Dollar.•Another risk that may also exist is the potential for adverse movements in the interest rate that applies to the foreign currency facility or transaction.•You should also be aware that in some circumstances mechanisms may be available for limiting these risks. Such mechanisms may include products ranging from forward FX contracts (FEC’s) and fixed rate loans to more complex options and derivatives. A solution can be tailored to your specific business needs.•For more information about managing risks associated with international trade, go to the “Business” tab on our website www.nab.com.au and click on > International and Foreign Exchange. For more information regarding Foreign Exchange Risk please telephone a NAB Business Markets Specialist on 1800 307 827 (7am — 7pm EST).You should seek independent professional advice before entering into a Facility or transaction in a foreign currency. In particular, advice should be sought as to the suitability of a foreign currency facility or transaction for your purposes and risk management strategies available for such facilities or transactions.

1.GETTING STARTED

Before we get started and you can use any Global Trade Finance Facility:

•we will need everything set out in clause 3 of the Business Lending General Terms; and

•you will need to nominate or set up and maintain a linked bank account with us in your name. This will be your Nominated Account for transactions under the relevant Facility as specified in the Facility Details. The NAB Foreign Currency Account — Onshore Terms and Conditions govern use of that account in relation to a Foreign Currency Overdraft Facility and otherwise the NAB Business Products Terms and Conditions govern the use of that account. For a Foreign Currency Overdraft Facility, you don’t need a separate linked foreign currency bank account. We will keep a record of transactions relating to the Facility in the relevant currency.

2.FOREIGN CURRENCY OVERDRAFT FACILITIES

2.1Specific requirements to use a Foreign Currency Overdraft Facility

Please refer to clause 4 of the Business Lending General Terms which set out the basic requirements for each use of a Facility except a Drawdown Notice is not required. In addition, before you can use a Foreign Currency Overdraft Facility, we need to be satisfied that (unless we agree otherwise):

(a)the currency of use is one we approved for the Facility; and

(b)the requested use amount, when notionally converted to the relevant currency of the Facility (as we determine at our prevailing spot rate of exchange) would not cause the Facility Limit to be exceeded.

2.2Facility Limit

(a)You can borrow and repay under the Foreign Currency Overdraft Facility multiple times, so long as the debit balance of your account doesn’t exceed the Facility Limit. If:

(i)the debit balance of the account exceeds the Facility Limit, you must pay us the excess immediately. Until you do (and subject to paragraph (ii) immediately below), you must pay default interest calculated at the end of each day on the excess amount at the Default Interest Rate divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms); or

(ii)the Facility Amount Owing remains unpaid after the Final Repayment Date, you must pay default interest calculated at the end of each day on the Facility Amount Owing at the default rate applicable to the transaction account under its NAB Business Products Terms and Conditions divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms).

(b)Please note that:

(i)either we or you can decide to cancel the Facility Limit at any time by written notice. If we do so, we will give you at least go days’ notice before this takes effect, however we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(ii)you can decide to reduce the Facility Limit at any time by written notice.

2.3Repayment

We can require you to repay all or part of the Facility Amount Owing at any time, but we will give you at least go days’ notice before you must pay, except that:

(a)we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action; and

(b)on the Final Repayment Date (and without us either giving you notice or making a demand on you), you must pay the Facility Amount Owing.

2.4Prepayment

You may prepay the whole or any part of the Facility Amount Owing at any time.

2.5Interest

(a)The interest rate is the Debit Balance – Base Interest Rate for the relevant foreign currency payable in relation to debit balances on Foreign Currency Accounts plus the Customer Margin.

(b)You can find out what the actual Debit Balance – Base Interest Rate is at any time by visiting the “Business” tab on nab.com.au and search “Foreign Currency Account Rates” or you can contact us for information about current rates.

(c)Interest is calculated daily at the end of each day on the Value Balance (excluding any amount to which a Default Interest Rate applies) by applying the daily interest rate, which is the relevant yearly interest rate divided by 365 or 360 (depending on the type of currency as specified in the Business Lending General Terms).

(d)The “Value Balance” is the overdraft account’s debit balance, except that interest charges for an Interest Period (including any interest adjustment) do not form part of the Value Balance until the first day of the next Interest Period (even though they may be included in overdraft account’s debit balance from the date they are debited).

(e)Interest for:

(i)an Interest Period is debited to your overdraft account on the last Business Day of that Interest Period; and

(ii)the last Interest Period is debited to your overdraft account on the Final Repayment Date.

(f)Where a transaction for a particular day is processed by us after that day, for whatever reason, we may elect to back-date that transaction and, if we do this, an appropriate interest adjustment will be made to your overdraft account on the next interest debit date.

2.6What currency applies

(a)You must ensure that all payments for the Foreign Currency Overdraft Facility are in the currency of the overdraft account.

(b)Fees and charges are calculated in Australian Dollars and may be debited to the overdraft account with any necessary currency conversions made in accordance with the provisions of the ‘NAB Foreign Currency Account — Onshore Terms and Conditions’.

3.LETTERS OF CREDIT

3.1Specific requirements before we will issue a Letter of Credit

Please refer to clause 4 of the Business Lending General Terms which sets out the basic requirements for each use of a Facility, except a Drawdown Notice is not required. Our additional requirements to issue a Letter of Credit are:

(a)before the relevant cut-off time for the requested issue date (which we will notify you upon request) you must give us:

(i)an application through NAB Connect, or a properly signed application in a form acceptable to us requesting us to issue a Letter of Credit. The application must set out the name of the proposed beneficiary, the requested amount, the issue and expiry dates and any requirements concerning the form of the requested Letter of Credit; and

(ii)any other documents or information we require (see clause 3.3(b) below); and

(b)we need to be satisfied that (unless we’ve agreed otherwise):

(i)the Issue Date is a Business Day before the Final Repayment Date;

(ii)the currency of the Letter of Credit is one we approved in writing for the Facility; and

(iii)the requested Letter of Credit amount, when notionally converted to Australian Dollars (which we determine at our prevailing spot rate of exchange) would not cause the Facility Limit for the Facility to be exceeded.

3.2If we are unable to issue a Letter of Credit

Sometimes there may be legal or operational reasons we can’t issue a Letter of Credit. We will let you know if this is the case. Examples include:

(a)you request a Letter of Credit in a foreign currency that we have not approved; or

(b)a service we require in order to issue a Letter of Credit is temporarily disrupted or unavailable.

3.3The form of the Letter of Credit

(a)Each Letter of Credit will be in our usual form, unless we agree otherwise.

(b)In certain circumstances specific to a Letter of Credit, we may require you to execute additional documentation in accordance with our normal practice to manage risks in connection with the Letter of Credit. Unless you comply, we may not be able to issue the Letter of Credit.

(c)All Letters of Credit issued under the Facility will be subject to the terms and conditions of the prevailing Uniform Customs and Practice for Documentary Credits or International Standby Practices (as published by the International Chamber of Commerce) or such other terms as we agree in writing. You must ensure you are aware of those terms and conditions and accept them, including any indemnities required to be provided except to the extent the liability, loss or Costs are caused by our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our employees, officers and agents).

3.4Authority to pay

(a)You irrevocably authorise us to pay any amount for which a demand or request is made at any time under a Letter of Credit without reference to you, and without further authority from you.

(b)We need not investigate or enquire whether a claim or demand has been properly made.

(c)We may meet any claim or demand even if you dispute its validity.

(d)Unless a Standby Letter of Credit’s terms say otherwise, we may at any time end our obligations under a Standby Letter of Credit by paying to the Beneficiary an amount up to the Maximum Liability (or any lesser amount that discharges our obligations under it). We may do so even though the Beneficiary has not demanded payment.

3.5Your undertaking to pay

(a)You must pay or reimburse us the amount of each payment we make under a Letter of Credit, or on any Bill drawn on and accepted by us in connection with a Letter of Credit, immediately on such payment or Bill being drawn.

(b)You irrevocably authorise us to debit your Nominated Account, or any of your accounts maintained with us (including any deposit account opened by us in your name under these Specific Conditions) (Other Account), in relation to any such amounts payable by you under this clause 3.5.

(c)We may, without notice and without making a demand on you, debit the Nominated Account or an Other Account, even though another provision of the Bank Documents says that the amount is payable on demand.

(d)We may, without notice and without making a demand on you, take and apply any cash cover held by us in the Nominated Account or an Other Account pursuant to the Bank Documents against any of your obligations under the Bank Documents, including where we voluntarily paid out the Letter of Credit. You irrevocably authorise us to do anything necessary for that purpose, and regardless of whether the Facility has expired.

(e)We are not obliged to debit the Nominated Account or any Other Account with any amount payable by you under the Bank Documents, and nothing in this clause relieves you of your obligation to pay each amount to us when due under the Bank Documents.

(f)You agree to indemnify us (and any of our officers, employees and agents), any receiver or receiver and manager appointed under a Bank Document (and any of their respective officers, employees and agents) and any attorney appointed by you under a Bank Document, (and any of their respective officers, employees and agents) in respect of:

(i)any amounts we pay to a Beneficiary under a Letter of Credit; and

(ii)any loss, damage and Costs which we incur or for which we become liable, directly or indirectly in connection with:

(A)the issue or variation of a Letter of Credit;

(B)any payment or claim for payment under a Letter of Credit; or

(C)anything done by a Beneficiary or any other person in relation to or in reliance on a Letter of Credit;

(D)any termination or cancellation of a Letter of Credit other than on its scheduled expiry date,

excluding consequential loss, economic loss and also excluding losses, damage or Costs to the extent directly caused by our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our employees, officers, agents and External Administrators). This indemnity does not limit, and is in addition to, any other indemnity or obligation in our favour under any other Bank Document or given by law.

(g)You must pay us any indemnified amounts in Australian Dollars (even if the payment we made is in a different currency), unless we agree otherwise in writing.

(h)You must pay any indemnified amounts at each of the following times:

(i)the date we make payment under a Letter of Credit;

(ii)the date we incur a present obligation to make payment under a Letter of Credit (where the conditions to the payment, such as presentation of the Letter of Credit, have been satisfied); or

(iii)when Default occurs; or

(iv)the date we take Enforcement Action under the Bank Documents.

(i)Each of your payment obligations under this clause 3.5 is independent of each of your other payment obligations under this clause 3.5.

3.6Bills drawn on us in connection with a Letter of Credit

We will accept any Bills drawn on us in connection with a Letter of Credit on presentation and make payment in accordance with the terms of the Bill. You must pay and indemnify us for doing so in accordance with clause 3.5.

3.7Insurance

You must:

(a)insure all goods relating to each Letter of Credit drawn under the Facility to our satisfaction (unless we otherwise agree in writing);

(b)give us a copy of any insurance policy or certificate relating to those goods when received or at such time as is agreed with us; and

(c)hold proceeds of any claim under an insurance policy on trust for us unless we otherwise agree in writing.

3.8Use of correspondent banks

We may direct a Letter of Credit to our correspondent bank for negotiation or other action. If we do this, the correspondent bank may pay us a commission for each Letter of Credit directed to them and you consent to us receiving any such commission.

3.9Pledge

(a)As security for your obligations to us in connection with each Letter of Credit, you authorise us to retain by way of pledge the documents and goods relating to the Letter of Credit, all proceeds of sale and insurances relating to such documents and goods, and all of your rights as unpaid seller.

(b)If we request, you agree to execute any other documents that we reasonably require to grant us a Security Interest in the documents and goods relating to a Letter of Credit.

3.10Additional consequences of Default

(a)If you are in Default and we are entitled to take Enforcement Action, in addition to any other rights and obligations under the Business Lending General Terms:

(i)we may require you to provide cash cover on terms satisfactory to us for an amount not more than the Maximum Liability under each outstanding Letter of Credit, in the currency of the Letter of Credit;

(ii)where the Facility Amount Owing has become due and payable, we may sell, dispose of or otherwise deal with any documents or goods pledged to us as security as we think fit and apply the proceeds towards satisfaction of your obligations to us in connection with the relevant Letters of Credit;

(iii)we may collect any amount due under any policy of insurance in relation to any goods; and

(iv)we may require you to grant other Security Interests acceptable to us.

(b)We may exercise any of our rights under the Bank Documents even though one or more Letters of Credit remain outstanding on that date.

(c)If, on a day when you provide cash cover or make a payment required under the Business Lending General Terms when you are in Default, a portion of that money is to cover undemanded amounts under Letters of Credit that we have issued, then clause 3.13 will apply for the holding of that portion of money.

3.11Delivery of documents or goods

If any documents or any goods in relation to a Letter of Credit are:

(a)delivered by us to you or to any person authorised by you to receive those documents or goods on your behalf; or

(b)received by you (or by any such person on your behalf),

before you have fully paid and discharged your obligations to us in relation to the Letter of Credit, you agree that:

(c)if directed by us acting reasonably, you must receive those goods or documents for us and must hold them and any proceeds of sale on trust for us and keep them separate from other goods and money;

(d)you must hold the proceeds of any claim on any policy of insurance on trust for us; and

(e)we may at any time take possession of and receive the goods or any proceeds of the sale or disposal of the goods.

3.12Final Repayment

On the Final Repayment Date, you must pay us:

(a)the Facility Amount Owing, less

(b)the amount of cash cover you have provided us which is still available to us up to the total Maximum Liability amounts under any unexpired Letters of Credit on issue.

3.13Deposit of cash held to cover undemanded Letters of Credit

(a)Where a portion of the cash cover paid to us under clause 3.10(a)(i), clause 3.12 or clause 7.1(c) is to cover undemanded amounts under Letters of Credit that we have issued, then we will deposit that portion in an interest bearing term deposit account (which account may be with us) on terms we consider appropriate.

(b)You must provide us with a Deposit Letter for all money to be held by us in such a term deposit account, and we will hold that money until it is:

(i)applied towards paying a Beneficiary of a Letter 0f Credit; or

(ii)paid to you after all of your obligations (contingent or otherwise) under the Bank Documents have been satisfied, together with any interest earned on the term deposit account (net of our income tax liability in connection with those earnings).

(c)Where the required term deposit account is provided by us, we may charge you the usual fees and charges for the operation of such an account.

(d)Your obligations under the Facility continue for any Letters of Credit in respect of which payment of the whole or part of the Maximum Liability has not yet been demanded by the Beneficiary.

3.14Interest

Interest charges will apply where a Letter of Credit under a Documentary Letter of Credit &/or Documents Surrendered &/or Trade Refinance Facility is refinanced.

4.TRADE REFINANCE FACILITY OR OVERSEAS BILLS PURCHASED FACILITY

4.1Specific requirements to use a Trade Refinance Facility or Overseas Bills Purchased Facility

Please refer to clause 4 of the Business Lending General Terms which set out the basic requirements for each use of a Facility. In addition, before you can use a Trade Refinance Facility or Overseas Bills Purchased Facility:

(a)you must give us any other documents or information we require before the relevant cut-off time for the requested date of use (which we will notify you upon request); and

(b)we need to be satisfied that (unless we’ve agreed otherwise):

(i)the currency of the Facility is one we approved in writing for the Facility; and

(ii)the requested use amount, when notionally converted to Australian Dollars (which we determine at our prevailing spot rate of exchange) would not cause the Facility Limit to be exceeded.

4.2What if we can’t meet a requested use?

Sometimes for legal or operational reasons we will decline a requested use of a Facility. We will let you know if this is the case. Examples include where you have requested a foreign currency that we have not approved, or a service we require in order to make the requested use available is temporarily disrupted or unavailable.

4.3Repayments and prepayments

(a)Each use of a Facility is for an agreed term, and you must repay the outstanding amount for each use in full at the end of the agreed term for that use. Where we’ve agreed, you can prepay all or part of the outstanding amount beforehand.

(b)Any amount repaid or prepaid before the Final Repayment Date will not reduce the Facility Limit. So, you may ask to redraw back up to the Facility Limit. Any such further use of the Facility is subject to the Business Lending General Terms and these Specific Conditions.

4.4Interest

(a)If the Facility Details state that interest is payable in arrears, then:

(i)all accrued interest for each use of the Facility is payable and debited to your Nominated Account on the last day of the agreed term for that use, (or if not a Banking Day, then on the last Banking Day of the term); and

(ii)all accrued but unpaid interest is payable and debited to your Nominated Account on the Final Repayment Date.

(b)If the Facility Details state that interest is payable in advance, interest for each use of the Facility is:

(i)calculated based on the outstanding amount at the first day of the agreed term of use and for the number of days in that term; and

(ii)payable and debited to your Nominated Account on the first Banking Day of that term.

(c)You can find out what the actual interest rate is at any time by visiting the “Business” tab on nab.com.au and search “Rates Fees and Charges” to find the relevant indicator rate. The full method of calculation of your interest rate is set out in the Facility Details.

(d)You can also contact us to find out the interest rate that will apply. The interest rates we quote for a day will apply if you use the relevant Facility by a certain cut-off time on the day. We can let you know the cut-off time too. We will confirm the applicable interest rate following drawdown.

5.CANCELLATION AND REDUCTION OF THE FACILITY LIMIT

(a)You can cancel a Facility at any time by giving us at least 2 Business Days’ prior written notice. You must then pay us the Facility Amount Owing for the Facility on the date the cancellation takes effect.

(b)We can cancel any part of the unused Facility Limit at any time (and in the case of a Foreign Currency Overdraft Facility, any part of the Facility Limit) after giving you at least 90 days’ written notice, even if the Facility has a later Facility Expiry Date, however we may give you a shorter notice period or no notice period if a Default has occurred and we are entitled to take Enforcement Action.

(c)You can decide to reduce the Facility Limit at any time by written notice.

(d)If the reduced Facility Limit is then lower than the amount used under the Facility, you will need to immediately repay us so that the Facility Limit is not exceeded. Our rights under this clause are in addition to any rights we have under the Business Lending General Terms.

6.WHICH ACCOUNTS WE CAN DEBIT

Unless otherwise agreed:

(a)for Foreign Currency Overdraft Facilities, you authorise us to debit your overdraft account with any amounts payable by you in relation to the Facility, including interest, fees and charges, taxes, enforcement expenses and any amount payable under an indemnity. Any necessary currency conversions for a debit will be in accordance with the ‘NAB Foreign Currency Account — Onshore Terms and Conditions’ applicable to the account; and

(b)for any other Facility, you authorise us to debit to your Nominated Account with any amounts payable by you in relation to the Facility, including interest, fees and charges, taxes, enforcement expenses and any amount payable under an indemnity. If the amount payable by you is in a different currency to the Nominated Account, we may notionally convert the amount at the rate of exchange we determine for a transaction of that size on that day against the account currency for the debit. The exchange rate used will be notified in a confirmation we will provide to you, outlining the transaction, the rate used and any fees.

7.FOREIGN CURRENCY FACILITIES OR TRANSACTIONS

7.1Funding risk and non-availability

(a)We will use our best efforts to notify you as soon as practicable if having your Facility in a foreign currency is not reasonably practicable or impossible as a result of:

(i)any change in national or international financial, political or economic conditions, currency exchange rates, currency availability or exchange controls;

(ii)any event or contingency which materially and adversely affects the inter-bank, currency or financial markets generally; or

(iii)any change in any law (including the introduction of a new law), or any change in the interpretation or administration of any law.

(b)During the 30 days after a notice is given, we will discuss with you any alternative basis to continue the affected Facility.

(c)If no agreement is reached within that 30 day period, the Facility automatically terminates and you must immediately repay in full the Facility Amount Owing. In the case of any outstanding Letters of Credit, you must also immediately provide cash cover on terms satisfactory to us for an amount not less than the Maximum Liability under each outstanding Letter of Credit in the same currency, and clause 3.13 will apply for the holding of that portion of money.

7.2Currency Indemnity

If a judgment or order is given by any court or tribunal for you to pay any amount or damages relating to the Facility in a currency different to the applicable currency for the Facility or the use of the Facility, you indemnify us against any deficiency in the amounts we receive arising or resulting from any difference between the exchange rates:

(i)used to convert the applicable Facility currency for the purpose of the judgment or order; and

(ii)at which we can buy the applicable Facility currency with the judgment currency at the time of our receipt.

7.3No advice or management by NAB

You acknowledge and agree that we do not, and you must not rely on us to, manage, supervise or advise you in relation to your foreign currency exposure, whether or not related to any Facility.

7.4Foreign currency fluctuations

If a change in the exchange rate between a foreign currency of a Facility or use of a Facility and Australian Dollars causes the outstanding amount under the Facility (when notionally converted by us to Australian Dollars at our prevailing spot rate of exchange) to exceed the Facility Limit in Australian Dollars (when notionally converted by us at the rate of exchange we used at the time of approving the Facility), we may require you to either (at your option):

(a)repay a sufficient amount of the Facility equal to that excess; or

(b)provide additional Security Interests acceptable to us to the value reasonably determined by us, but not less than the amount of such excess.

8.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in these Specific Conditions with a specific meaning are either explained in the Facility Details, the Business Lending General Terms or below.

Beneficiary means a person to whom we have issued a Letter of Credit.

Bill means a documentary bill of exchange.

Deposit Letter means a security agreement in the form we require from time to time which grants us a Security Interest in a deposit account.

Issue Date means the date a Letter of Credit is issued or is to be issued by us.

Letter of Credit means documentary letter of credit or standby letter of credit issued or to be issued under the Facility.

Maximum Liability means, in respect of a Letter of Credit, the maximum amount we are or may become liable to pay under that Letter of Credit (excluding interest on that amount).

National Australia Bank Limited ABN 12 004 044 937 AF5L and Australian Credit Licence 230686Page 11

Borrowing Base Annexure to the Global Trade Finance Specific Conditions

1.WHAT THIS DOCUMENT IS ABOUT

This Annexure applies if the Facility Details for a Trade Refinance Facility specify that it applies. It is to be read in conjunction with the Business Lending General Terms and the Global Trade Finance Specific Conditions which apply to this Facility.

2.ADDITIONAL SPECIFIC REQUIREMENTS FOR USE OF THE FACILITY

In addition to clause 4 of the Business Lending General Terms and clause 4 of the Global Trade Finance Specific Conditions, the additional requirements for the first drawing of the Facility are set out in clause 2.1 and the additional requirement for each use of the Facility is set out in clause 2.2.

2.1First drawing

Before you provide us with the first Drawdown Notice under the Facility, we must have received the following, in form and substance satisfactory to us:

(a)a certified copy of each Relevant Document, properly completed and executed;

(b)a certified copy of each Insurance Policy and the certificate of currency relating to it;

(c)evidence that the Approved Inventory Location has been inspected by us and we have approved the quantity of Approved Inventory located at the Approved Inventory Location;

(c)evidence that we have been granted a right of entry to each Approved Inventory Location; and

(d)evidence that each security interest given in our favour, or which the Borrower or any Security Provider has under PPS Law, including any security interest it may have in inventory located at an Approved Inventory Location, has been registered under the PPS Law.

2.2Each drawing

Before you provide us with any Drawdown Notice under the Facility, we must have received any additional documents or information we reasonably request for the purposes of determining the Borrowing Base Limit or the operation of this Facility, in form and substance satisfactory to us.

3.DRAWDOWN NOTICE

Each Drawdown Notice must be substantially in the form attached to this Annexure. You may only submit a Drawdown Notice if:

(a)you have provided us with a Borrowing Base Report in accordance with clause 5.1(a);

(b)prior to and following the proposed drawing, no more than two drawings denominated in Australian Dollars would be outstanding; and

(c)prior to and following the proposed drawing, the Facility Amount Owing for this Facility would not exceed the Borrowing Base Limit.

4.ADDITIONAL PROMISES WE RELY ON

In addition to your other promises, you also make the following promises to us.

(a)All:

(i)receivables listed in a Borrowing Base Report are Approved Receivables and those receivables identified as Trade Credit Insured Receivables are covered under an Insurance Policy;

(ii)inventory listed in a Borrowing Base Report is Approved Inventory; and

(iii)of the information in each Borrowing Base Report are true and accurate and not misleading in any respect.

(b)You have good title to:

(i)the inventory and receivables listed in a Borrowing Base Report; and

(ii)the goods being sold to each buyer listed in a Borrowing Base Report,

free and clear of any Security Interest, and you are lawfully entitled to assign or grant any Security Interest over any receivable or inventory listed in a Borrowing Base Report, and there are no restrictions or prohibitions on you doing so.

(c)Each Relevant Document is in full force and effect, and has not been amended or terminated without our consent.

(d)Each Storage and Handling Agreement is on substantially the same terms as the standard industry terms.

(e)There is no current, pending or threatened dispute in respect of any Contract relating to the inventory or receivables listed in any Borrowing Base Report or any Storage and Handling Agreement.

5.ADDITIONAL UNDERTAKINGS

5.1Undertakings

In addition to your other undertakings to us, you must:

(a)provide to us an up-to-date Borrowing Base Report:

(i)on the first day of each monthly period following the date of this Agreement;

(ii)in respect of each drawing, no earlier than two Business Days before the proposed date of drawdown and no later than one Business Day before the proposed date of drawdown;

(iii)at such other times we may reasonably require;

The report must reflect the current position as at the date it is provided to us.

(b)unless we agree in writing:

(i)not agree to any variation or termination of any Relevant Document; and

(ii)provide to us, a certified copy of each Relevant Document and any variation to a Relevant Document, entered into after the date of this Agreement with our prior consent by no later than two Business Days after it is signed;

(c)unless we agree in writing:

(i)maintain each Insurance Policy and comply with all of the terms of the Insurance Policy;

(ii)ensure that we are notified within two Business Days of any change made to an Insurance Policy and promptly provide to us, a copy of all notices or other communications you receive under any Insurance Policy;

(d)ensure that:

(i)we (or the Inspection Agent) are permitted to undertake a field inspection in relation to any Approved Inventory Location and your debtor management systems at such times as we require subject to the following:

(A)each type of inspection is not undertaken more than once every half-year after the date of this Agreement (General Field Inspection);

(B)you receive at least than 30 days’ notice; and

(C)we (or the Inspection Agent) and the relevant personnel comply with the Approved Storage Location Operator’s operating procedures and occupational health and safety guidelines;

(ii)we (or the Inspection Agent) have access to all premises and records for the purposes of undertaking such field inspection;

(iii)you, if applicable, procure that the Inspection Agent provides to us a Site Quality Inspection Due Diligence Report in respect of each Approved Inventory Location;

(e)ensure that payments made by each buyer listed in a Borrowing Base Report are made directly to the Nominated Account (as defined in the Facility Details of this Facility) and that all invoices issued to such persons stipulate this; and

(f)comply with your own Risk Management Policy.

5.2Negative Pledge

You undertake to us that, for so long as you have any outstanding obligations or liabilities to us in connection with this Facility, you must:

(a)ensure that the Approved Inventory and Approved Receivables are not subject to any Security Interest except in our favour; and

(b)not sell, assign, dispose of or otherwise deal with any Approved Receivables (or any interest in them) to any person other than us.

6.ADDITIONAL REVIEW EVENT

(a)Each of the following is a review event (Review Event):

(i)any of the following persons is Insolvent:

(A)an Approved Storage Location Operator operating a location where Approved Inventory is stored; or

(B)an Approved Buyer in respect of which any Approved Receivable remains outstanding from that Approved Buyer.

(b)Promptly after you become aware that a Review Event has occurred, you must give us full details of that Review Event and any steps you have taken, or are proposing to take, to remedy it.

(c)You and we agree to enter into negotiations for at least 30 days (Review Period), with a view to agreeing terms on which we would be prepared to offer to provide, fund or maintain all or any of this Facility.

(d)If agreement is reached, you must do all acts and execute all documents as we reasonably require to document, or to protect, preserve or secure our rights and interests under, such agreement.

(e)If agreement is not reached by the end of the Review Period or if you fail to comply with your obligations under clause 6(d), an additional Adverse Event will arise and we may exercise any of our rights set out in this Agreement.

7.ADDITIONAL ADVERSE EVENTS

Clause 11 (Default) of the Business Lending General Terms — which sets out provisions in relation to Default, including Payment Defaults and Adverse Events (and their consequences) — applies to this

Agreement. In addition, as this is a Specialised Facility, an Adverse Event will also occur under this Facility if:

(a)an Approved Insurer of an Insurance Policy held by you is Insolvent; or

(b)clause 6(e) applies.

8.ADDITIONAL CONSEQUENCES OF DEFAULT

If you are in Default and we are entitled to take Enforcement Action, in addition to any other rights and obligations under the Business Lending General Terms:

(a)we (or an Inspection Agent) may undertake an inspection in relation to any Approved Inventory Location and your debtor management systems at any time within ordinary business hours without prior notice (and subject otherwise to clause 5.1(d));

(b)we may require you to take any action that we consider reasonable and appropriate in relation to any Insurance Policy (including requiring you to assign any Insurance Policy to us); and

(c)in respect of an Approved Buyer, we may:

(i)require sales agreements and receivables to be assigned or novated to us; and

(ii)exclude the receivables owing by that Approved Buyer from the Borrowing Base Limit.

9.POWER OF ATTORNEY

(a)You irrevocably, for valuable consideration, appoint us and each of our authorised officers severally to be your attorney (Attorney) to execute and deliver all documents and instructions and do all things under and in connection with any Insurance Policy.

(b)The Attorney may appoint or remove any substitute or delegate or sub-attorney.

(c)You agree to ratify anything done by the Attorney in exercising its powers under this clause.

10.FOREIGN CURRENCY TRANSACTIONS

If the Facility involves a foreign currency and if the amount of a proposed drawing in a Drawdown Notice would cause the Balance Owing in Australian Dollars (when we notionally convert it at our prevailing Exchange Rate) to exceed the Borrowing Base Limit, we may amend the Drawdown Notice so that the Borrowing Base Limit will not be exceeded as a result of such drawing.

11.FEES

In addition to any other fees payable under this Agreement (including those set out in the Facility Details), you must pay the Drawdown Fee in respect of each drawing on the repayment date for that drawing.

12.ACKNOWLEDGEMENT AND CONSENT

You agree and acknowledge that, for the purposes of our ongoing monitoring of the Facility and to assist us to manage our risks under the Facility, we may wish to provide information about you and the Facility to a service provider (including any service provider located outside Australia). You irrevocably consent to this occurring, provided at all times that the service provider has obligations of confidentiality to us.

13.INTERPRETATION AND MEANING OF WORDS

Capitalised terms used in this Annexure with a specific meaning are explained in the Facility Details, the Business Lending General Terms or below.

Advance Rate means the rate corresponding to the relevant inventory category and Approved Storage Location, as follows:

Inventory categoryApproved Storage LocationAdvance RateTier 1 — All:WheatBarleySorghumCanolaPasture Genetics Pty LtdSeed Genetics Australia Pty LtdO’Neil Transport Pty LtdLand Storage and Distribution Pty LtdMonaro Freight Pty LtdTasmanian Freight Services Pty LtdRural Logistix Pty LtdLeocata’s Transport Pty LtdGippsland Couriers Pty LtdK&S Seed Processors Pty LtdLandmark Corporation Pty LtdNorthern Agri Services Pty LtdPursehouse Rural Pty LtdAusWest Seeds Pty LtdHolbrook Seeds Pty LtdMaitland Clean Grain Pty LtdManoora Seeds Pty LtdModra Seeds Pty LtdMorton Seed and Grain Pty LtdUpper Murray Seeds Pty LtdLovitts Seeds Pty LtdTasmanian Seed Dressing and Storage Company Pty LtdAGF Seeds Pty LtdBaker Seeds Pty LtdFrances Seeds Seed Pty LtdLSD ToowoombaLand TSP Pty LtdTatiara Seeds Pty LtdHeazlewood Seeds Pty LtdKongal Seeds Pty LtdPGG Wrightson Seeds Pty Ltd60%Tier 2 — All:LupinsPeasBeansLentilsChick PeasVetchSunflowerWhite CloverMedicLucerne (Alfalfa)SunflowerTriticaleRye GrassFescueOats60%

Approved Buyer means:

(a)a person named, from time to time, as a buyer approved by the insurer (or approved by you exercising a delegated authority granted by the insurer) as being covered under an Insurance Policy;

(b)such other persons approved us in writing,

who purchases goods or services or both from you.

Approved Insurer means:

(a)in respect of Trade Credit Insured Receivables, Atradius; and

(b)in respect of Approved Inventory, an insurer acceptable to us.

Approved Inventory means inventory described in the table in the definition of Advance Rate (including all industry accepted grades and sub type of the types listed as such) which inventory also satisfy the following criteria:

(a)the country of origin is not a Sanctioned Country;

(b)stored in the Approved Inventory Location;

(c)covered by an Insurance Policy; and

(d)pre-sold on standard industry terms.

Approved Inventory Location means each of the following locations:

(a)All ‘Approved Storage Locations’ listed above; and

(b)such other locations as agreed between us and you in writing provided that we are granted a right of entry in form and substance satisfactory to us in respect of each such location.

Approved Receivables means receivables of yours in respect of which:

(a)the buyer is an Approved Buyer;

(b)payment has not remained outstanding for more than 21 days past the invoice due date; and

(c)the invoice is due and payable in full in accordance with terms approved by us and not subject to any dispute, counterclaim or set-off.

Approved Storage Location Operator means all storage locations listed above, or such other operators as you and we agree in writing.

Borrowing Base Limit means the lesser of the Facility Limit and the total of the following:

(a)Advance Rate of the Agreed Average Selling Price of each Approved Inventory that is within the relevant Location;

(b)80% of the book value of Trade Credit Insured Receivables that are within the relevant Buyer Limit (provided that if the resulting amount comprises an amount for an Approved Buyer that exceeds its Buyer Limit, then any amount exceeding its Buyer Limit will be disregarded for the purposes of this calculation).

Borrowing Base Report means a report which provides information in relation to the Approved Inventory and Approved Receivables including:

(a)information in sufficient detail for us to be able to identify type, grade, volume, value and location of inventory and identify amounts receivable from each Approved Buyer;

(b)details of all Approved Inventory, including:

(i)country of origin;

(ii)location;

(iii)product type;

(iv)quantity;

(v)grade;

(vi)average sale price;

(vii)weekly Inventory valuation price (to be calculated using the Current Market Value of Approved Inventory);

(viii)total value;

(c)summary details of each invoice in relation to each Approved Receivable listing amounts owed to you by Approved Buyers including:

(i)name;

(ii)payment terms;

(iii)credit limit;

(iv)invoice reference number;

(v)date of issue of invoice;

(vi)value of invoice; and

(vii)due date for payment in relation to invoice;

(d)a summary sheet showing the calculation made to arrive at the Borrowing Base Limit, such summary sheet to be in the form agreed by us.

Buyer Limit for an Approved Buyer means in respect of a Trade Credit Insured Receivable, the lesser of the limit specified for a buyer under the Insurance Policy and any limit nominated for that buyer by us from time to time.

Contract means a contract for goods or services.

Current Market Value means the current market value calculated using the method determined by us from time to time.

Drawdown Fee means $100 per drawing.

General Field Inspection has the meaning it has in clause 5.1(d)(i)(A) of this Annexure.

Inspection Agent means RSM or any substitute agent appointed by us from time to time.

Insurance Policy means each insurance policy set out below:

(a)an insurance policy issued by an Approved Insurer in your and our name as first loss payee in form and substance satisfactory to us covering commercial default or non-payment (and country risk if applicable) in relation to the payment obligations of the buyer under a Contract and each Invoice related to that Contract;

(b)an insurance policy issued by an Approved Insurer in your and our name as first loss payee in form and substance satisfactory to us covering all risk and any losses and covering 100% of the Approved Inventory; and

(c)any other insurance policy required by us in connection with the inventory and receivables listed in a Borrowing Base Report.

Location Limit, in respect of an Approved Inventory Location, means the limit nominated for that Approved Inventory Location by us from time to time.

Relevant Document means each of the following:

(a)each sales agreement entered into by you on terms substantially the same as the sales terms approved by us;

(b)storage and handling terms approved by us which includes rights for the you or us to control and deal with the stored inventory in agreed circumstances;

(c)each Storage and Handling Agreement on terms substantially the same as the storage and handling terms approved by us; and

(d)your Risk Management Policy.

Risk Management Policy means a risk and collections policy with respect to inventory and receivables management.

Sanctioned Country means a country affected by Australian sanction laws as notified by the Commonwealth Department of Foreign Affairs and Trade at http://dfat.gov.au/international-relations/security/sanctions/sanctions-regimes/Pages/sanctions-regimes.aspx

Site Quality Inspection Due Diligence Report means a site quality inspection due diligence report provided by the Inspection Agent addressed to us setting out the results of the inspection in relation to

[the Inventory and each Approved Inventory Location and covering any other matters as may be notified to you by us.

Storage and Handling Agreement means an agreement between you and an operator of a storage facility.

Tier 1 Approved Inventory means:

•Wheat

•Barley

•Sorghum

•Canola

Tier 2 Approved Inventory means:

•Lupins

•Peas

•Beans

•Lentils

•Chick Peas

•Vetch

•Sunflower

•White Clover

•Medic

•Lucerne (Alfalfa)

•Sunflower

•Triticale

•Rye Grass

•Fescue

•Oats

Trade Credit Insured Receivables means each Approved Receivable that is insured by an Approved Insurer for no less than 90% of the accounts receivable value.

Trade Refinance Facility or this Facility means any Facility titled ‘Trade Refinance Facility’ in the Facility Details to which this Annexure applies.

To:National Australia Bank Limited ABN 12 004 044 937

Level 3

1 Homebush Bay Drive

Rhodes NSW 2138

Attention: Borrowing Base Trade Refinance Team (NAB)

From: Pasture Genetics Pty Ltd (ABN: 33 074 290 252) (Customer or We)

BORROWING BASE TRADE REFINANCE - DRAWDOWN NOTICE

We refer to the Business Letter of Offer between NAB and the Customer dated 13/02/2020 (Agreement).

We request NAB to provide the loan described in this form.

Section A   Request (complete all sections)

Proposed Drawdown Date
Facility Limit (Currency and amount of Facility Limit)	AUD10,000,000.00
Amount (Currency and amount of proposed drawing)
Term of drawing (Number of days)
Drawing Repayment Date

Proceeds of this drawing are to be credited to the Customer’s Nominated Account (as defined in the Agreement).

Section B   Repayment Instructions

On the Drawing Repayment Date, NAB is authorised to debit the Customer’s Nominated Account (as defined in the Agreement), with the Amount plus the applicable interest, fees and charges.

Section C   Borrowing Base Report

☐Copy of the Borrowing Base Report relating to this drawing is attached.

We certify the Borrowing Base Report accompanying this request is true and correct as at the date of this request.

Section D   Acknowledgement and Authority

We agree and acknowledge that:

• each of the conditions in the Agreement is satisfied on the date of this request except as otherwise notified to NAB.

• each of the “Promises we rely on” in the Agreement (including in the Borrowing Base Annexure) are true in respect of the facts existing at the date of this request.

• NAB may amend this request to reduce the amount of the proposed drawing in accordance with the terms of the Borrowing Base Annexure.

This request is governed by the terms and conditions of the Agreement.

This request is irrevocable.

For and on behalf of

(Full name and ACN/ABN of applicant)

By:

(Authorised Signature)(Authorised Signature)

(Name in block letters)(Name in block letters)

BUSINESS LENDING
GENERAL TERMS

Effective 24 June 2019

CONTENTS

1.What to readPage 03

2.How we will work with youPage 03

3.Getting startedPage 03

4.Using your FacilitiesPage 04

5.PaymentsPage 05

6.AccountsPage 06

7.RatesPage 06

8.Fees, taxes and CostsPage 07

9.Promises we rely onPage 08

10.Things you will do, or not doPage 10

11.DefaultPage 11

12.Change in law, anti-money laundering, counter-terrorism financing and sanctionsPage 15

13.Our securityPage 16

14.Changes we may makePage 18

15.Economic Costs and benefitsPage 19

16.CommunicationsPage 19

17.Interpretation, assignment and confidentialityPage 20

18.Meaning of wordsPage 21

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1. What to read

These Business Lending General Terms apply to all Facilities you have with us. They should be read with your Business Letter of Offer which lists the Facilities we are offering you. For each Facility the letter will include:

• Facility Details (such as the purpose, pricing, limits, expiry date and key financial terms); and

• •Specific Conditions (these govern the use of that type of Facility, together with these Business Lending General Terms).

The Facility Details and Specific Conditions may make changes to how these Business Lending General Terms apply to a Facility.

2. How we will work with you

2.1Our promise to you

We will act reasonably and fairly towards you, taking into account your and our respective business interests. That includes whenever we are:

• considering any request you make; or

• deciding whether to give our consent or to exercise a right, discretion or remedy; or

• setting any conditions for doing any of those things.

It’s worth noting that even if we don’t make a decision or do something straight away, we may still do so later on. This includes where we delay or defer doing so, or we temporarily waive a requirement.

2.2Our commitment to good banking practices

Doing the right thing is important to us. That’s why we’ve adopted the Banking Code which sets the standards of practice and service for banks. The Banking Code applies to our relationship with you if you are an individual or a small business as defined in the Banking Code.

You can obtain from us, on request:

• information on our current rates and standard fees and charges relating to the Facilities;

• general descriptive information concerning our banking services (including about cheques, account opening procedures, bank cheques, our confidentiality obligations and complaint handling procedures) and concerning the importance of reading the terms and conditions for each banking service we provide to you and informing us promptly when you are in financial difficulty;

• general descriptive information about the identification requirements of the Anti-Money Laundering & Counter Terrorism Financing Act 2006 and the options available to you under tax file number legislation; and

• a copy of the Banking Code.

To find out more about the Banking Code, visit nab.com.au and look up “Banking Code”.

3. Getting started

Before you can use any Facility we will need the following (unless we’ve told you otherwise):

• a properly accepted Business Letter of Offer (it may be electronically signed);

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• all Security specified in the Business Letter of Offer, satisfactory to us, with original title documents and anything else we need to register the Security and have it as first ranking security;

• details of any nominated or linked transaction account required in connection with the Facility;

• if we have asked you to insure any of your assets, evidence that you have obtained insurance we are comfortable with. That may include noting our interest on your policy; and

• anything else that the Facility Details ask for.

Also, we will need to be satisfied:

• with any valuation we require of your assets (this must be for a value, and from a valuer, we are comfortable with). See clause 13 for details;

• with our “know-your-customer” checks;

• with title, security, insolvency and corporate searches concerning you, any Security Provider and all Security assets. We will arrange these searches and let you know if there are any issues; and

• you are not in Default. See clause 11 for more details.

4. Using your Facilities

4.1Basic requirements for each use of a Facility

Once we’ve received everything we need for you to start using a Facility, the basic requirements for each use are:

• you have given us a Drawdown Notice beforehand (so we have time to check everything is in order and make any funding available). Unless the applicable Specific Conditions say otherwise, we will need this at least 2 Business Days before the requested date of use;

• in the case of the first use of the Facility, the requested date of use is no later than the Last Date for Drawdown (if any) set out in the Facility Details;

• in all cases, the requested date of use is a Business Day no later than the Final Repayment Date;

• the requested use is for a purpose, and meets any other requirement, as specified in the Facility Details;

• using the requested amount won’t cause any Facility Limit to be exceeded (and if the Facility has different components that you can use, it won’t cause any component amount specified in the Facility Details to be exceeded);

• each Security remains valid and enforceable and, in the case of a guarantee, no guarantor has ended or limited its obligations; and

• you are not in Default. See clause 11 for more details.

4.2Facility Limits

The Facility Details specify a limit for use of the applicable Facility, and whether that limit can

change. If a Facility has different components that you can use, the Facility Details will also specify each component amount, which is the limit for use of a component.

If you exceed any limit without our agreement, you must pay us the excess immediately. Until you do, we may charge you the applicable Default Interest Rate on that excess amount.

If you ask us in advance, we may let you temporarily exceed a limit. There may be a fee for exceeding your limit, which we will tell you about before we charge it. You will then need to pay us the excess when we ask you or on the date we’ve already agreed you will pay.

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4.3Reviewing your Facilities

We may review your compliance with the Bank Documents, your financial position and that of each Security Provider periodically (but at least annually).

You must give us all requested information, documents, consents and assistance in connection with a review. Following a review, we may continue to provide the Facilities on the same terms, or we may notify changes we may make under clause 14 or ask you and any Security Provider to vary Bank Documents or to enter new documents with us.

5. Payments

5.1Regular payments

You must pay us the amounts, and at the times, set out in the Facility Details and Specific Conditions.

On the Final Repayment Date you must pay all the Facility Amount Owing. We will give you at least 3 months written notice if we intend not to renew any Facility after the Final Repayment Date.

If any amount that we have not already told you about becomes payable under the Bank Documents, we will notify you and provide a reasonable time for you to pay.

5.2What currency must you pay us in?

You must pay us in Australian dollars unless the Specific Conditions say otherwise.

If you pay us in a currency other than the one which was due, we can convert your payment into the due currency. We will act reasonably when making the conversion, but any Costs involved in converting currencies will be added to what you must pay us. Please contact us if you require information about converting currencies.

This also applies if we are debiting an account of yours which is in a different currency to the due
currency.

5.3Payment rules

If and when you are required to make a payment under a Bank Document, that payment must be
made in full without any set-off, counterclaim, withholding or deduction, except as required by law (for example, where a court order permits). If you do have a dispute about a payment, please contact us
so we can seek to resolve this with you as soon as possible.

If a payment falls due on a non-Business Day, you can pay us on the next Business Day unless the
Specific Conditions say otherwise.

If we have not specifically agreed in your Bank Documents how we are to apply a particular payment,
we will act reasonably in applying payments we receive for any Facility Amount Owing against your
liabilities to us.

5.4Payments under other Bank Documents

In addition to your obligations under clause 5.1, you must pay us all amounts that you are
required to pay us under any other Bank Document in relation to credit or financial
accommodation that we provide to you, at the times set out in those other Bank Documents.
However, we will only enforce this Agreement for your failure to repay an overdraft or on-

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demand facility in another Bank Document if we have complied with our obligations under clause 11.1 (and the Banking Code, if applicable).

6. Accounts

6.1Dealing with your accounts

The Specific Conditions may require you to nominate or open accounts with us in your name in order to use a Facility. This is for recording transactions for the Facility.

We may also, at any time:

• open accounts with us in your name to record certain transactions relating to your Facilities; and

• debit any account held by you (or an account conducted by us in your name) with any Facility Amount Owing that is due and payable, or which we may become liable to pay in respect of a Facility, even if that causes an account to become overdrawn. If there are multiple accounts for your Facility, we can choose which account we debit from.

If you are in Default, we do not need to give you notice of this.

Where an account is overdrawn we may charge you interest on the overdrawn amount at the applicable Default Interest Rate. You must pay us the overdrawn balance of an account within a reasonable time after we ask, but doing so as soon as you can will minimise your costs.

We may sometimes have to adjust the recorded date of a debit or credit to an account. We will act fairly and reasonably in doing so.

6.2Account statements

We will give you any statements for your Facilities and accounts with us as required by the Banking Code, and may do so electronically. Statements of account will be provided every 6 months, unless we agree a different frequency or the Specific Conditions say otherwise.

7. Rates

The Facility Details and Specific Conditions specify the yearly rates and charges for a Facility. The Facility Details will say whether an applicable rate for a Facility (or, if applicable, for a component of a Facility) is a fixed rate, cap rate, floor rate, floating rate or variable rate, and how rates apply to the Facility. These details also include the available periods that rates apply for (sometimes referred to as interest periods or pricing periods). When a period ends, the next period starts on the last day of the previous period.

7.1Interest calculation and charging

Unless the Specific Conditions say otherwise, we will calculate applicable interest at the end of each day on the outstanding loan or debit account balance for each Facility you have with us, and charge it to you on the last Business Day of each month and on the Final Repayment Date for each of your Facilities.

Unless paid when charged, the interest will be debited to an account you have with us or added to the Facility Amount Owing. This could mean you have to pay interest on any unpaid interest charged to you.

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Daily interest is calculated at the annual interest rate divided by 365. For foreign currency Facilities, to get the daily rate we divide by 365 if in Fiji Dollars (FJD), Pounds Sterling (GBP) or Hong Kong Dollars (HKD), or by 360 in all other cases.

7.2Variable rates and floating rates

If a variable rate or a floating rate applies to your Facility (or any applicable component of your Facility), the rate will be made up of an “indicator rate” plus one or more margins, each as specified in the Facility Details and applicable Specific Conditions. A variable rate or a floating rate therefore may change from day to day with changes in the indicator rate or in a margin.

You can contact us to find out the indicator rate. If an indicator rate is less than zero, it will be deemed to be zero for determining the applicable rate for your Facility.

7.3Indicative rates

A rate listed in the Facility Details as ‘indicative’ or a ‘current rate’ is a guide only, and may not be the actual rate that applies. The Specific Conditions explain how the actual rate is determined and advised to you.

7.4Default Interest Rate

It is important that you pay all amounts on time and don’t exceed your Facility Limits. The applicable Default Interest Rate will apply and be calculated at the end of each day on the following amounts (unless we’ve agreed otherwise):

• any overdue amount of a Facility Amount Owing;

• any amount overdrawn under an account you have with us; and

• any use of a Facility above a Facility Limit.

The rate applied each day is the applicable Default Interest Rate divided by 365.

Interest at the applicable Default Interest Rate is charged to you on the last Business Day of each month and on the Final Repayment Date for each of your Facilities. Unless paid when charged, the interest will be debited to an account you have with us or added to the Facility Amount Owing. This could mean you have to pay interest on any unpaid interest charged to you.

8. Fees, taxes and Costs

8.1Fees

You agree to pay us each fee, charge, premium or other amount and at the times, specified in the Bank Documents. Unless otherwise stated, these amounts are not charged on a pro-rata basis and once paid, are not refundable.

8.2Taxes and Costs

You agree to pay or reimburse us for all taxes and reasonable Costs incurred from time to time relating to:

• the Bank Documents, the Facilities you have with us and any transactions under them;

• title, security, insolvency and corporate searches concerning you, any Security Provider and all Security assets;

• preparing, registering and maintaining any financing statement or financing change statement (each as defined in the PPS Law) in relation to a Security, or taking any other action that in our reasonable opinion is necessary;

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• preserving and maintaining the assets and property the subject of the Security (such as by paying insurance, rates or taxes for the property, including any interest, penalties and fines);

• a variation, release or discharge of any Bank Document, or giving a consent or approval or waiving a requirement in connection with a Bank Document;

• us acting or relying in good faith on any notice or other communication from you (or genuinely believed by us to be from you) including any email and any attachment to any email;

• a Default or us exercising or enforcing our rights (or reasonably considering or attempting to do so) under the Bank Documents; and

• the costs or remuneration of, or any amounts payable by us to any External Administrator appointed by us.

8.3You indemnify us

You also indemnify us (and our officers, employees, contractors and agents), and must pay to us on demand amounts equal to any loss, damage or Costs arising as a result of or in connection with:

• any of the payment and reimbursement obligations listed in clause 8.2; and

• us preserving or enforcing our rights (or reasonably considering or attempting to do so) under the Bank Documents.

You don’t have to pay, reimburse or indemnify us:

• to the extent our fraud, negligence or misconduct (or the fraud, negligence or misconduct of our officers, employees, contractors and agents) contributed to the relevant loss, damage or Costs being incurred; and

• if you are a Small Business, to the extent any fraud, negligence or misconduct by an External Administrator appointed by us contributed to the relevant loss, damage or Costs being incurred.

We need not have incurred an expense or made a payment before enforcing a payment, reimbursement obligation or indemnity.

8.4GST

Unless otherwise specified, all amounts referred to in the Bank Documents are exclusive of GST. If we are liable to pay GST or a similar tax on a supply (as defined in relevant GST legislation) made in connection with a Bank Document, you must pay us an additional amount equal to the consideration payable for the supply multiplied by the prevailing GST rate.

9. Promises we rely on

We are relying on some important promises from you to provide the Facilities. These promises are given when you or a Security Provider sign any Bank Document, and again while using a Facility.

9.1Promises about you and the Security Providers

You promise that:

• you hold all necessary approvals, licences, registrations and permits required to run your business;

• the financial information given to us by you and each Security Provider, or on your or a Security Provider’s behalf, gives an accurate and up to date view of your and each Security Provider’s financial positions;

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• you have not withheld any information from us which might reasonably be expected to affect our decision to provide any Facility to you;

• you don’t have a material dispute with anyone;

• entering into the Bank Documents is for your and each Security Provider’s own commercial benefit;

• you are not Insolvent;

• no Security Provider is Insolvent;

• you have told us about all Defaults you are aware of;

• except as specified in your Business Letter of Offer, you are not a trustee of any trust nor a partner in a partnership;

• signing the Bank Documents and using a Facility will not cause:

o you to breach any law of Australia or elsewhere (including sanctions) or any agreement you have with someone else; or

o any payment obligation you owe to anyone to become due earlier than scheduled;

• you have told us about any Security Interest granted by you or a Security Provider to anyone else;

• you, and each Security Provider, will not remove, sell or dispose of, or grant or permit the creation of, any interest (including a Security Interest) in any property or assets secured under a Security (or try to do so) unless we give our consent;

• you are currently complying with your obligations to us under this Agreement and any other Bank Document; and

• if you have a Specialised Facility or you are not a Small Business, any Financial Covenants are complied with.

9.2Trustee promises

If you enter into a Bank Document as a trustee, your liability to us is supported by you personally, your own assets and the trust assets. You also promise that:

• you are the only trustee of the trust and no steps have been taken to remove you as trustee;

• you have power and authority to enter into the Bank Documents and are doing so in good faith, for a proper purpose and for the benefit of all of the beneficiaries of the trust;

• you have the right to be fully indemnified out of the trust assets for obligations incurred as trustee under the Bank Documents ahead of the beneficiaries’ claims;

• you are not in breach (however described) under the terms of the trust;

• you will not without our prior written consent:

o amend the trust deed;

o cease to be the only trustee; or

o breach your duties as trustee of the trust.

• the trust has not vested or terminated; and

• true copies of the trust documents have been provided and they disclose all the terms of the trust.

9.3Partnership promises

If you enter into a Bank Document as a partner of a partnership, you promise that:

• you have the full power and authority on behalf of the partnership (including under any partnership agreement) to sign and comply with the Bank Documents as a partner to bind the partnership, and doing so is for the proper business of the partnership; and

• true copies of any documented partnership agreements have, if requested by us, been provided by you and they disclose all the terms of the partnership.

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10. Things you wilt do, or not do

We are relying on your agreement to do, or to not do, certain things, as set out in the Bank Documents. This applies for as long as you have a Facility or otherwise owe us any money.

You will:

• keep your business and financial records in good order;

• not significantly change the nature of your business without our consent;

• maintain insurance for your business, assets and premises for a reasonable amount. You will take out more insurance if we ask you to; and

• let us know straight away if you become aware of a Default or if you think one is reasonably likely to occur, or if anything happens which means that any of the promises in clause 9 becomes untrue.

41.1Trustees

If you enter into a Bank Document as a trustee you will:

• give us copies of all of the trust documents we ask for;

• when we ask, exercise your right to be indemnified out of the trust assets to satisfy any liabilities under the Bank Documents; and

• comply with the terms of the trust and ensure that your rights as trustee have priority over the beneficiaries’ interests.

You agree not to do any of the following without our written consent:

• end the trust, or distribute trust assets;

• change the trust terms;

• change the trustee of the trust;

• allow a Security Interest to exist over any trust asset;

• (if the trust is a unit trust) issue units to any person who is not a unit holder on the date of your Business Letter of Offer.

10.2Partnerships

If you enter into a Bank Document as a partner of a partnership, you must make sure that:

• each partner complies with its obligations as a partner of the partnership;

• the partnership’s records are in good order;

• you obtain our written consent before:

o any changes are made to the partners or the terms of the partnership;

o the partnership is terminated, or its property distributed;

o taking action which could make it harder for a partner to comply with a Bank Document; or

o mixing partnership assets with other assets.

10.3Self-managed superannuation funds

If you are a trustee of a self-managed superannuation fund regulated under the Superannuation Laws, you need to comply with those laws.

If you wish to use a Facility to buy an asset, you will need to sign and comply with the terms of a Superannuation Deed in a form acceptable to us.

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Our recourse to your fund will be limited in accordance with the terms of the Superannuation Deed. Please note that the terms of the Superannuation Deed prevail over any inconsistent term in another Bank Document.

Due to the requirements of the Superannuation Laws, despite any other term in a Bank Document you must not redraw any amount you repay under a Facility. The reasons you must not redraw include that your superannuation fund may not comply with the Superannuation Laws if a redraw occurs and there may also be adverse tax consequences for your superannuation fund. We recommend you seek your own independent taxation, legal and financial advice.

If you have used a Facility to buy an asset, you agree to not overdraw your accounts and to pay, or direct your security trustee to pay, us any proceeds received:

• from any insurance claim relating to the asset, before repaying the Facility Amount Owing; and

• if the asset is compulsorily acquired, sold or otherwise disposed of, immediately following receipt.

10.4Co-operation

You will immediately give us any document or information we reasonably ask for and do what we reasonably require to give full effect to the Bank Documents.

11.5What if you don’t comply with your promises?

Even if you are not in Default at the time, if you or a Security Provider don’t comply with promises

or other obligations in a Bank Document, we may contact you and invite you to discuss your situation with us and the options available to assist you to meet your obligations.

If we determine a failure to comply is continuing, and is reasonably likely to have a significant negative impact on:

• you or a Guarantor being able to make any payment due under a Bank Document; or

• our credit or security risk (or our ability to assess these) — for example, our ability to recover any Facility Amount Owing or the value of any Security; or

• our legal or reputation risk,

we may review your Facilities. Any outcome of a review does not affect our rights if later you are in Default. Clause 11 sets out when you are in Default and the consequences.

You must give us all requested information, documents, consents and assistance in connection with a review. Following a review, we may continue to provide the Facilities on the same terms, or we may notify changes we may make under clause 14 or ask you and any Security Provider to vary Bank Documents or to enter new documents with us.

Also, if you are not a Small Business, as a result of a review we may notify you that:

• we no longer wish to continue the Facilities, in which case you will need to pay us the Facility Amount Owing within 90 days (or such later date we advise you); or

• a failure to vary Bank Documents or to enter new documents with us by a certain date will require you to pay us the Facility Amount Owing within a further 90 days (or such later date we advise you), failing which you will need to make that payment.

11.Default

Defaults are events or circumstances (sometimes outside your control) which may impact upon your or a Guarantor’s ability to meet their respective obligations under a Bank Document, or which are outside our credit policies.

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There are two types of Default, and each has different consequences and timeframes before we may become entitled to take Enforcement Action:

• a Payment Default — see clause 11.1; and

• specific events of non-monetary default (referred to as Adverse Events) — see clause 11.2.

If you have an overdraft or on-demand facility the applicable Facility Details or Specific Conditions may also provide that we can require repayment without notice, whether or not there is a Default.

11.1Payment Defaults and consequences

What is a Payment Default?

A Payment Default occurs if you don’t meet all your payment obligations under this Agreement, including those in clause 5.

What are the consequences of a Payment Default?

If a Payment Default occurs you are in Default, but we will give you a notice that a Payment Default has occurred allowing at least 30 days (or 7 days if you are not a Small Business) to remedy it.

However, we may give you a shorter notice period, or no notice period (or if you are not a Small Business, we do not need to give you any notice), if:

• based on our reasonable opinion, it is necessary for us to act to manage an immediate risk, for example, if we became aware that you were attempting to sell any assets or property secured under a Security contrary to the terms of a Bank Document;

• you are Insolvent, or enforcement action is taken against you by us or another credit provider;

• we believe, on reasonable grounds, that you or a Guarantor have not complied with the law or any requirement of a statutory authority; or

• we have already given you a period to remedy an Adverse Event under clause 11.2.

We can immediately take any or all of the Enforcement Actions listed in clause 11.4 where:

• a Payment Default is not remedied within the required notice period set out in any notice given under this clause (or within any longer period we allow);

• we give a notice under this clause but are not required to give a notice period; or

• we are not required to give a notice.

11.2Adverse Events and consequences

What is an Adverse Event?

An Adverse Event occurs if any of the following occurs (whether or not within your control):

• Insolvency:

o you are Insolvent;

o a Guarantor is Insolvent;

• Loss of capacity: you or any Guarantor no longer has legal capacity;

• Creditor enforcement: enforcement proceedings are taken against you or a Guarantor, or your or their assets, by another creditor;

• Cross default:

o early repayment is required under a separate financing arrangement you or a Guarantor has with us, or default based action is taken against you or a Guarantor by us, due to an event of default which is of the same kind as an Adverse Event in this Agreement;

o if you are not a Small Business, you are, or any Guarantor is, in default (however described) under any Security or other document, agreement or arrangement with us;

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• Breach of law: we believe, on reasonable grounds, that you, your agent or a Guarantor have not complied with the law or any requirement of a statutory authority, or it becomes unlawful for you or us to continue with a Facility;

• Misrepresentation: you or a Guarantor gives us information or makes a representation or warranty to us (including any promise made under any Bank Documents) which is materially incorrect or misleading (including by omission);

• Improper use of Facility: you use a Facility for a purpose not approved by us;

• Improper dealings with assets: without our consent, your assets or a Guarantor’s assets are dealt with, or attempted to be dealt with in breach of this Agreement, any Security or any other agreement with us;

• Failure to provide financial information: you or a Guarantor do not provide financial information required by any Bank Documents;

• Failure to maintain licence or permit: you or a Guarantor do not maintain a licence or permit necessary to conduct your respective businesses;

• Failure to maintain insurance: you or a Guarantor do not maintain insurance required by any Bank Documents. This includes, for example, where the insurance becomes unenforceable because of any action or inaction by you;

• Change of control: without our consent, there is a change in the legal or beneficial ownership, or management control of you or a Guarantor, or of your or a Guarantor’s business;

• Change of status, capacity or composition: without our consent, there is a change in the status, capacity or composition of you or a Guarantor; and

• Specialised Facilities and Financial Covenants: if you have a Specialised Facility, or you are not a Small Business:

o any ‘Financial Covenant’ specified in this Agreement is not complied with; or

o an event or circumstance specified in this Agreement as an ‘Adverse Event’ occurs.

If you are not a Small Business, then references to “Guarantor” above are read as references to “Security Provider”.

What are the consequences of an Adverse Event?

If an Adverse Event occurs, then you are in Default.

You must promptly give us any information we ask for concerning an Adverse Event.

If an Adverse Event has occurred which by its nature is material, or we reasonably consider has had, or is likely to have a significant negative impact on:

• you or a Guarantor being able to make any payment due to us under any Bank Document;

• our credit or security risk (or our ability to assess these) — for example, our ability to recover any Facility Amount Owing or the value of any Security; or

• our legal or reputation risk where the Adverse Event is one described above under ‘Breach of law’, ‘Misrepresentation’ or ‘Improper use of a Facility’,

then we may issue a notice (“Adverse Event Notice”).

An Adverse Event Notice will allow you at least 30 days to remedy the Adverse Event (if it can be remedied) or to submit to us a plan to resolve the Adverse Event to our satisfaction.

If, after the period specified in the Adverse Event Notice:

• the Adverse Event has not been remedied to our satisfaction; or

• your plan to resolve the Adverse Event was not satisfactory to us,

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then we may give you a further notice that the Adverse Event has not been remedied and allowing at least 7 days (or a longer period required by law) to remedy the Adverse Event. However, we may give you shorter notice periods than those described above or no notice periods (or if you are not a Small Business, no notices), in relation to an Adverse Event where, based on our reasonable opinion, it is necessary for us to act to manage an immediate risk, for example, if we became aware that you were attempting to sell any assets or property secured under a Security contrary to the terms of a Bank Document.

We can immediately take any or all of the Enforcement Actions listed in clause 11.4 where:

• an Adverse Event is not remedied within the required notice period set out in any notice given under this clause (or within any longer period we allow); or

• we give a notice under this clause but we are not required to give a notice period; or

• where we are not required to give a notice.

If an Adverse Event is not material or does not have the impact as described above, then we may ask for further information, but we will not take any further action.

11.3What if another Default occurs during the remedy period?

Even if you remedy a Default during the applicable remedy period specified in a notice, we may still take Enforcement Action if another Default of the same type has arisen during that period.

11.4Enforcement Actions

After any applicable steps and time periods described above, when you are in Default we can take any or all of the following Enforcement Actions:

• by notice to you, make any Facility Amount Owing immediately due and payable without the need to give any further notice other than as required by law;

• by notice to you, cancel the Facilities with immediate effect;

• by notice to you, cancel or reduce all or any part of a Facility Limit (or if applicable, a component limit) with immediate effect;

• close out any treasury transactions we have entered into in relation to a Facility (such as hedging, money market or currency transactions) and set-off any resulting amounts we owe you against any Facility Amount Owing;

• continue to charge interest at the applicable Default Interest Rate on any overdue amounts (including interest);

• at our discretion, apply amounts we receive in respect of any Facility Amount Owing to any part of the Facility Amount Owing which you are then obliged to pay. We may do so even if you ask or direct us otherwise, but we will act reasonably in the circumstances and in accordance with the law;

• sue you for any Facility Amount Owing; and

• enforce any Security.

11.5Concurrent notices

We, or an External Administrator, may give you any other notice that is required by law in connection
with enforcing a Security Interest at the same time as we give you a notice under this clause 11.

11.6Appointment of consultants

We may appoint a consultant at any time to investigate and report to us on your or a Guarantor’s
business, and on compliance of any party with the Bank Documents.

If, based on what we know or suspect, we think a Default exists or is likely to exist in future you
will, if we ask, pay our reasonable Costs in relation to the consultant, or appoint a consultant we

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nominate or approve on terms acceptable to us. We can charge all related Costs that you have to pay to any of your accounts.

You will help us and the consultant as soon as you are asked to.

Where you have paid the Costs of the consultant, we will (unless the consultant is a lawyer) give you a copy of our instructions to the consultant and extracts of their report in accordance with industry guidelines published by the Australian Bankers Association Inc.

Investigated parties are not required to adopt any recommendation, but if they do we are not responsible for it.

11.7Set-off and combining your accounts

We may at any time:

• combine and amalgamate any two or more accounts held by you (or an account conducted by us in your name) with us;

• set off or transfer any credit balance on any such account towards satisfaction of any amounts due and owing by you to us (whether alone or with any other person); and

• do anything reasonably necessary to enable us to do this, such as converting currency using our exchange rate.

However, if you are a Small Business, we will not exercise these rights unless either we give you notice or there is a Default. Otherwise, we will notify you after exercising these rights.

12. Change in law, anti-money laundering, counter-terrorism financing and sanctions

12.1Consequences of a change in law

If the law changes and we reasonably believe that it will be against the law for us to provide or continue to provide a Facility to you, we will:

• let you know as soon as we can; and

• work with you to ensure the law is being complied with.

If we are required by law to ask you to pay back some or all of the amounts you owe us we will give you as much notice as the law allows.

12.2Increased costs or reduced amounts received

If any law or prudential standards, policies or requirements applying to us changes and we reasonably believe that there will be:

• a material increase in the cost to us of providing or maintaining the Facilities; or

• a material reduction in the effective return or amount we are able to receive in relation to a Facility,

then we will let you know as soon as we can and try to eliminate or reduce the amount of the adverse impact on us.

To the extent that we cannot eliminate or reduce the amount of the adverse impact you must compensate us for that amount.

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12.3Anti-money laundering, counter-terrorism financing and sanctions

You must comply, and must ensure each Security Provider complies, with all applicable

requirements relating to anti-money laundering, counter-terrorism financing or sanctions.

We may take, or avoid taking, any action (for example, we may delay, block or refuse to process any payment or other transaction) if in our reasonable opinion to do otherwise may:

• breach any law of Australia or elsewhere (including any sanctions); or

• result in a fine being imposed on, or any other regulatory action being taken against, us, any of our subsidiaries, any body corporate that is directly or indirectly related to us, or any entity with whom we have entered into arrangements in connection with any services provided under the Facilities.

12.4Regulatory events

From time to time, our ability to provide the Facilities to you may be interrupted, prevented, delayed or otherwise adversely affected by regulatory events such as the application of anti-money laundering or counter-terrorism financing laws or sanctions, changes in law or prudential standards, policies or requirements applying to us, or by the actions of a regulatory authority.

If you are affected by, or suffer a loss due to a regulatory event, we, our subsidiaries and related bodies corporate are not liable and are not required to challenge or mitigate the effect of the regulatory event on you or on us.

If we are liable, our liability is limited to re-supplying the Facilities to the extent that we are able to and are allowed to by law.

You agree that we can share information with other financial institutions and regulatory

authorities about you, the Facilities, a regulatory event or another person connected with any of them.

If we ask, you agree to promptly provide us with any document or information about yourself, the Facilities or any person connected with you or the Facilities and to help us manage risk, comply with our obligations or obtain any consent we need.

13. Our security

13.1Valuations

At any time we reasonably require we may instruct a valuer to value any Security and any property that is the subject of any Security. A valuation may be obtained in order to assess:

• the value of assets the subject of a Security or proposed Security;

• our credit and security position for existing or prospective Facilities; or

• compliance with Financial Covenants (where applicable) or any other conditions in this Agreement, or for any other purpose we tell you about

You agree to:

• co-operate with the valuer;

• pay when asked any fees and charges in connection with the valuation; and

• comply with every reasonable request to provide assistance to the valuer including providing authorisations, relevant information, records, access to individuals, premises and business equipment used in the conduct of your business.

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Unless we have commenced enforcement proceedings (as defined in the Banking Code), where you have paid (or reimbursed us) for a valuation of commercial or agricultural real property, we will provide you with a copy of that valuation and the instruction to our valuer. We may require you to acknowledge in writing that you accept our reasonable limitations on your use of the valuation before we provide it to you. We will also give you the benefit of any additional rights you have under the Banking Code to receive valuation information from us.

Please note that we and the valuer are not responsible or liable to you or any Security Provider for the contents of a valuation.

13.2Protecting our security position

If we think that a PPS Law:

• applies or will apply to, or in connection with, a Bank Document; and

• does, or may adversely affect our security position, our rights or obligations in connection with a Bank Document,

we may ask you and you will help us immediately at any time including by:

• providing us with all information we request and taking all actions to help us perfect the Security;

• amending any Bank Document or executing any new Bank Document; and

• to continuously, or as and when we require you to, perfect any Security so it has priority and protection from loss, termination and diminution.

13.3Personal property security policies and steps

You will promptly take all reasonable steps which are prudent for your business in connection with the PPS Law, such as registering any Security Interests you receive in the ordinary course of your business. Where appropriate or when we ask you to, you will identify, protect and achieve the highest priority reasonably available for your Security Interests.

13.4Change of details

You must notify us in writing at least 14 days before:

• you or any Security Provider, trust or partnership changes its name;

• any ABN, ACN, ARBN or ARSN allocated to you or any Security Provider, trust or partnership changes, is cancelled or ceases to apply to it (or if it does not have an ABN, ARBN or ARSN, one is allocated, or otherwise starts to apply to it); or

• you or any Security Provider becomes trustee of a trust, or a partner of a partnership not stated in your Business Letter of Offer.

13.5PPS Law waiver

You waive, to the extent permitted under the PPS Law, your right to receive any notices we are required to give under the PPS Law.

13.6PPS Law disclosure

You agree not to disclose or authorise the disclosure to any person any information of the kind described in section 275(1) of the PPS Law or to waive your duty of confidence to us.

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14. Changes we may make

We may need to make changes to your Facilities from time to time. We may make some changes without your consent, some changes occur automatically and some changes require your agreement. We promise to act reasonably when we make any changes.

14.1Types of changes we may make

We may make the following types of changes without your consent:

• introduce a new fee, charge or premium;

• change the amount of a fee, charge or premium, how it is calculated or when it is charged;

• change a rate (other than a fixed rate) or the Default Interest Rate, including by changing or replacing the relevant indicator rate or a component used in determining a rate, or by changing, adding or removing a margin (including by making a margin positive or negative);

• change your repayment obligations, including the amount of or timing for any repayment, or your repayment type;

• change the frequency with which interest is debited or credited; and

• make necessary changes due to a change in law, to comply with or our prudential obligations as a bank, or as required by the Banking Code.

Any other changes to a Bank Document will need your agreement.

14.2When we will notify you of changes we make

We will give you at least 30 days’ notice of a change we make, except as follows:

• If we change an interest rate, including any indicator rate, we will comply with the notice requirements in the Banking Code and tell you no later than the date of the change — unless we are not able to because the interest rate is calculated according to a money market or other external reference rate, or a rate otherwise designated as a variable or floating rate.

• If we reasonably consider a change (other than a change to interest rates) will be unfavourable to you and the same change is not being made to similar facilities of our other small business customers, we will give you at least g0 days’ prior written notice of the change (however, we may give you a shorter notice period, if we believe doing so is necessary for us to avoid, or to reduce, a material increase in our credit risk.

• If there is a change to, or introduction of a government charge that you pay under your Facility, we will tell you about it reasonably promptly (however, we do not have to notify you if it is publicised by the government).

• If there is a change that reduces your obligations (for example, a reduction in a rate or fee), we may give you a shorter notice period, or no notice period, if not inconsistent with the Banking Code. However, we will give particulars of any such change as soon as reasonably possible, even if this is after the change takes effect.

• If repayment amounts have changed as a result of a change in a variable rate (for example a
Business Options Loan where a variable rate applies), we may not provide notice of the
change in repayment amount. A change in repayment amounts as a result of a change in a
variable rate may not happen immediately, but will generally occur up to 12 months after a
variable rate change. In cases where a variable rate has changed but the repayment amount
has yet to be re-calculated to reflect the rate change, the portion of your repayment amount
allocated to paying down your principal may change until such time the repayment amount has
been re-calculated. For example:

o If the variable rate goes up, your repayment amount will generally go up in the
12 month period after the rate changes. Until that happens, your total repayment
amount will not change, but the breakdown of your interest and principal

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repayments will - the portion of your repayment amount allocated to paying down your principal will go down (and you will pay more interest).

o If the variable rate goes down, your repayment amount will generally go down in the 12 month period after the rate changes. Until that happens, your total repayment amount will not change, but the breakdown of your interest and principal repayments will — the portion of your repayment amount allocated to paying down your principal will go up (and you will pay less interest).

If you require more information about your repayments, or want to change your total repayment amount (for example, if you want to increase your repayment amount so that you are paying the same amount of principal when interest rates go up), please contact us.

14.3How we will tell you about changes we make

We will notify you of changes we make by either writing to you or putting an advertisement in national or local media.

14.4What you can do if you don’t like a change

If you don’t agree with a change we make or are proposing to make, you may terminate the Facilities by notifying us in writing and repaying us each Facility Amount Owing. Economic Costs may be payable (see clause 15).

15. Economic Costs and benefits

An ‘Economic Event’ occurs if all or part of a Facility is being re-priced by agreement, or becomes payable or is cancelled, repaid or discharged early for any reason (including following a Default).

There are no early termination fees on your Facilities under this Business Letter of Offer. However, if an Economic Event occurs, we may need to liquidate funds or deposits or terminate, reverse or vary an agreement, arrangement or transaction we entered into to hedge, fix or limit our effective cost of funding or maintaining all or part of a Facility. In that case, we will determine and advise you of any resulting Economic Costs to us, or whether there is a benefit to you of any net amount of returns and gains obtained by us, including because of any changes in rates applicable to a Facility (all other things being equal).

You must pay us the amount of any advised Economic Costs, and if applicable to your Facility, we will pay you the amount of any net returns and gains we obtain.

Please note that the amount of Economic Costs you may need to pay following an Economic Event can be significant, and will increase the Facility Amount Owing.

16. Communications

16.1How we will communicate

Notices, statements, certificates and other communications from us can be:

• given to you personally;

• left at or posted to your address last nominated by you;

• sent by facsimile to your fax number last nominated by you;

• given to you by notifying you through an electronic service provided by us that information is available electronically;

• published in the press or at nab.com.au; or

• given to you electronically by:

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o short message service (SMS) to your mobile telephone number or email; or

o notifying you by short message service (SMS), or by email, of information on our website.

We will use your last nominated mobile number or email address for notices. You may change your nominated email address or mobile number, by giving us notice or calling us on 13 10 12. On request, we will provide you with paper copies of any notices or communications sent to you (seven years from the time the information is given). You must check your email and mobile phone regularly.

Your Specific Conditions also may specify how we will communicate some types of information to you.

If we send a document or communication to you by ordinary post, you are taken to have received it 7 Business Days after it was posted.

A document or communication sent by facsimile is received by you at the time and date shown on the delivery receipt.

A document or communication sent by another form of electronic communication (such as SMS or electronic mail) is taken to be received when it enters your information system as recipient.

A document or communication published in the press or on the internet is taken to be received by you when it is first published.

16.2Communications from you

Written communications from you must be signed (including electronically) by you (or by a director or another person we have approved in the case of a company or another entity).

16.3Telephone recording

We may record some conversations with you. We will notify you before we do so or use the recording for any external purpose.

16.4Contacting us for further information

For further information call 13 10 12 or visit nab.com.au.

17. Interpretation, assignment and confidentiality

17.1How this document is to be understood

We have tried to make the Bank Documents fair and reasonable. However, if any Law applies to make part of a Bank Document inoperative then the intention is for it to be interpreted in a way which preserves as much of the Bank Document and its operative effect as the law allows.

17.2Applicable law

This document is governed by the laws of the state or territory where the office issuing this document is located. You agree to any court dispute being conducted in the courts of that place.

17.3Assignment

We may assign or otherwise deal with our rights under the Bank Documents in any way we
consider appropriate (subject to the Banking Code if you are a small business),If we do so, you
agree to help us including by signing any document or providing consent. We may disclose any

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information or document to do so. You cannot assign your rights under the Bank Documents without our prior written consent.

17.4Confidentiality

We and you agree to keep any information provided to each other and the Bank Documents confidential. We and you will only disclose that information:

• to our respective officers, employees, legal and other advisers and auditors;

• to an External Administrator;

• to third parties with the consent of the other party (such consent not to be unreasonably withheld);

• if required by the rules of any relevant financial market or if allowed or required by law; or

• if there is a regulatory event (as described in clause 12).

We may also disclose that information:

• if we are assigning or otherwise dealing with our interest under any of the Bank Documents or proposing to do so;

• to register or maintain our Security;

• to enforce our rights under any of the Bank Documents; or

• to any Security Provider(or to a person we believe may become a Security Provider), but on the same confidential basis set out above.

17.5Law and legislation

Unless the context requires otherwise, a reference in the Bank Documents to legislation or other law or a provision of them includes regulations and other instruments under them, and any consolidation, amendment, re-enactment or replacement.

18. Meaning of words

The meanings of some words used in your Business Letter of Offer and these Business Lending General Terms are set out below, or may otherwise be explained in your Business Letter of Offer.

Adverse Event has the meaning given in clause 11.

this Agreement means the agreement between you and us in relation to the Facilities, as set out in the applicable Bank Documents.

Bank Documents means:

• your Business Letter of Offer;

• the documents listed at the start of that letter (including this Agreement, these Business Lending General Terms, Specific Conditions and the Business Banking Fees: A Guide to Fees and Charges);

• any Security; and

• any other document, agreement or arrangement you have with us from time to time.

Banking Code means:

• if the parties enter into this Agreement prior to 1 July 2019, the Code of Banking Practice (2013); or

• if the parties enter into this Agreement on or after 1 July 2019, the Banking Code of Practice (2019).

Banking Day means a day from Monday to Friday on which we are open for business in Sydney.

Business Day means a day from Monday to Friday on which we are open for business in at least one of our branch locations in Australia.

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Corporations Act means the Corporations Act 2001 (Cth).

Costs means our costs, charges, fees, expenses and other outgoings. This includes where we appoint advisers, lawyers or professional consultants and the reasonable expenses incurred by our staff and for the use of our operations, premises and resources.

Default has the meaning in clause 11.

Default Interest Rate means, in respect of a Facility or an overdrawn account as described in clause 6, the rate specified in the Facility Details, and if no rate is specified the default rate (however described) applicable to the nominated or linked account required in connection with the Facility.

Drawdown Notice means a notice requesting use of a Facility, or otherwise giving instructions in relation to a Facility, in a form and substance acceptable to us.

Economic Costs means any Costs and losses following an Economic Event.

Economic Event has the meaning given in clause 15.

Enforcement Action has the meaning in clause 11.4.

External Administrator means a receiver, receiver and manager, administrator, liquidator, provisional liquidator, controller or bankruptcy trustee.

Facility means any bank product we agree to provide to you under your Business Letter of Offer.

Facility Amount Owing means all money which you (whether alone or not) are, or at any time may be, liable to pay us under, or in connection with, a Facility.

Facility Details means the details for each Facility in your Business Letter of Offer.

Facility Limit means a financial limit for use of a Facility or a component of a Facility, as set out in the Facility Details.

Financial Covenant means a covenant specified in this Agreement which requires you to comply with, or report on, specified financial parameters, typically measured against your financial results in your financial statements. If you are:

• a Small Business, you may need to report on Financial Covenants to help us monitor our credit and security position, as set out in your Business Letter of Offer; and

• not a Small Business or you have a Specialised Facility, you must comply with a Financial Covenant specified in this Agreement, as noted in clause 9.1.

Final Repayment Date means, in respect of a Facility, the earlier of:

• the Facility Expiry Date(if any) specified in the Facility Details, or a later date as notified by us to you in writing;

• the date the Facility Limit is cancelled; or

• the date the Facility is terminated or otherwise ends,

or if that day is not a Business Day, the next Business Day (unless otherwise stated in the Specific Conditions for that Facility or unless otherwise agreed).

GST means goods and services tax as imposed under the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Guarantor means any person who provides a guarantee to us.

A person is Insolvent if:

• they are (or state they are) insolvent or an insolvent under administration (each as defined in the Corporations Act);

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• they have an External Administrator appointed to them or any of their assets, are in liquidation, in provisional liquidation, under administration or being wound up;

• execution, distress, or any other process is attempted or imposed regarding any of their undertaking, property or assets;

• a compromise, arrangement, assignment, moratorium or composition is proposed with, or becomes effective in relation to, their creditors or any class of their creditors (in each case, other than to carry out a reconstruction or amalgamation while solvent on terms approved by us);

• an application or order has been made (and, in the case of an application, it is not stayed, withdrawn or dismissed within 30 days), resolution passed, proposal put forward, or any other action taken, in each case in connection with them, which is preparatory to or could result in any of the things referred to above;

• they are taken (under section 459F of the Corporations Act) to have failed to comply with a statutory demand;

• they are the subject of an event described in section 459C(2)(b) or section 585 of the Corporations Act;

• they are a natural person who commits an act of bankruptcy within the meaning of the Bankruptcy Act 1966 (Cth);

• they are otherwise unable to pay their debts when they fall due; or

• something having a substantially similar effect to any of the things referred to above happens in connection with them under any law.

Our, We and Us means National Australia Bank Limited ABN 12 004 044 937 and its successors and assigns. Sometimes we refer to ourselves as NAB.

Payment Defaults are described in clause 11.

PPS Law means the Personal Property Securities Act 2009 (Cth).

Security means the ‘Security’ specified in your Business Letter of Offer or any Facility Details, and any other Security Interest granted to or held by us from time to time in connection with a Facility or any Facility Amount Owing.

Security Interest means a document or act creating a security for the payment of money or performance of an obligation. This includes a ‘security interest’ as defined in the PPS Law, and any general security, specific security, mortgage, charge, lien, pledge, guarantee, title retention, right of set—off, assignment of income, garnishee order or monetary claim and flawed deposit arrangements.

Security Provider means a Guarantor and any other person who provides a Security to us.

You are a Small Business, when the total of our business finance credit exposures to you and your related entities (that are businesses) is less than $5,000,000. This includes the total of all your existing debt to us, any undrawn amounts in relation to that debt, and any other credit or financial accommodation provided or being applied for. Your ‘related entities’ are those which fall within the definition of ‘related entity’ under section 9 of the Corporations Act and could include, for example, those entities which we reasonably determine are under common ownership control or management control with you or by you. We may make any such determinations under our aggregate risk exposure policies.

Specialised Facility means a Facility:

• used to fund property development; or

• used to fund a specialised lending transaction, which because of its nature, requires additional covenants to help us manage our risks, including margin lending, loans to self-managed superannuation funds, bailment, invoice discounting, construction finance, foreign currency loans and tailored cash flow lending.

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Specific Conditions — these are set out for each Facility in your Business Letter of Offer.

Superannuation Deed means a superannuation acquisition financing deed or superannuation financing deed (see clause 10.3).

Superannuation Laws means the Superannuation Industry (Supervision) Act 1993 (Cth).

You means each person identified as “you” in this Agreement and, if there is more than one person, means each person separately and every two or more jointly. It also includes your successors, and if you are a partnership, it includes the partnership as reconstituted from time to time (for example after admission, retirement, death or incapacity of a partner).

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EX-10.31

Exhibit 10.31

[***] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both not material and would likely be competitively harmful if publicly disclosed.

TERMINATION AGREEMENT

This Termination Agreement (“Agreement”) is by and among Pioneer Hi-Bred International, Inc., an Iowa corporation (“Pioneer”); and S&W Seed Company, a Nevada corporation (“S&W”).

WHEREAS, Pioneer and S&W entered into a series of agreements whereby Pioneer sold certain assets related to alfalfa to S&W and entered into certain ongoing relationships relating to alfalfa research, production, and distribution;

WHEREAS, Pioneer and S&W want to terminate many of the agreements and obligations relating to alfalfa; and

WHEREAS, the parties contemporaneously are entering into a license agreement whereby S&W is providing Pioneer certain rights relating to certain alfalfa varieties;

NOW, THEREFORE, Pioneer and S&W agree as follows:

1. Definitions.

1.1 Two entities are “Affiliates” if one of them, directly or indirectly, whether through one or more intermediaries, Controls the other, or both of them are, directly or indirectly, whether through one or more intermediaries, Controlled by the same entity.

1.2 “Control,” “Controls,” “Controlled by,” and “under common Control” shall mean (a) the ownership, directly or indirectly, whether through one or more intermediaries, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest in the case of any other type of legal entity, (b) status as a general partner in any partnership, or (c) any other arrangement by which an entity has, directly or indirectly, the power to direct or cause the direction of the management and policies of another entity.

1.3 “Distribution Agreement” means the Alfalfa Distribution Agreement dated December 31, 2014, as amended.

1.4 “Effective Date” means May 20, 2019.

1.5 “FGI” means Forage Genetics International, LLC.

1.6 “Grower Contracts” means the grower contracts set forth on Schedule 1.5 that relate to the Pioneer Licensed Varieties.

1.7 “Grower Contract Rights” means S&W’s rights under the Grower Contracts.

1.8 “Grower Obligations” means S&W’s obligations and liabilities under the Grower Contracts, including all amounts payable to the growers [or other named parties] pursuant to the Grower Contracts from the Effective Date forward.

1.9 “Inventory” means the quantity of alfalfa varieties as set forth on Schedule 1.9.

1.10 “License Agreement” means the Alfalfa License Agreement executed contemporaneously with this Agreement, whereby S&W provides Pioneer with certain rights to the Pioneer Licensed Varieties.

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1.11 “Pioneer Licensed Varieties” means the alfalfa varieties S&W licenses to Pioneer underthe License Agreement.

1.12 “Production Agreement” means the Contract Alfalfa Production Services Agreement, dated December 31, 2014, as amended.

1.13 “Research Agreement” means the Research Agreement dated December 31, 2014, as amended.

1.14 “Sequestered Varieties” means inventory, currently held by Pioneer, of certain alfalfa varieties identified in Schedule 1.14.

2. Termination and Windup of Agreements.

2.1 Grower Agreements and Inventory.

2.1.1 Assignment of Grower Agreements.

2.1.1.1 S&W hereby assigns the Grower Contract Rights to Pioneer and Pioneer hereby assumes the Grower Obligations, Within ten business days after the Effective Date, the parties will jointly notify all growers who are party to a Grower Contract of such assignment and assumption. The form of such notice shall be as set forth in Schedule 2.1.1.1.

2.1.1.2 Before S&W assigns the Grower Contract Rights, S&W shall fully satisfy all its obligations under the Grower Agreements that are required to be performed before the Effective Date. If any grower asserts a claim against Pioneer that S&W has not fully satisfied all such obligations as of the Effective Date or is otherwise in breach of a Grower Agreement as of the Effective Date, S&W shall defend Pioneer against, and indemnify Pioneer for all damages relating to, such grower assertion.

2.1.1.3 If any grower asserts a claim against S&W that Pioneer has not fully satisfied the Grower Obligations or is otherwise in breach of a Grower Agreement, Pioneer shall defend S&W against, and indemnify S&W for all damages relating to, such grower assertion.

2.1.1.4 Within ten business days after the Effective Date, S&W will provide Pioneer with all grower and company records related to the Grower Agreements.

2.1.1.5 Pioneer and S&W shall promptly execute, deliver and file, after good faith discussions, any and all agreements and other documents that shall be reasonably necessary for S&W to assign the Grower Contract Rights and Pioneer to assume the Grower Obligations.

2.1.2 Transfer of Inventory.

2.1.2.1 S&W is currently in possession of the Inventory. S&W will sell the Inventory to Pioneer, and Pioneer will purchase the Inventory from S&W as set forth in this Section 2.1.2.

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2.1.2.2 S&W will deliver, at Pioneer’s cost, the Inventory to a location designated byPioneer as set forth on Schedule 2.1.2.2. Pioneer will provide S&W with an expected seasonal delivery schedule on or before October 1, 2019. Pioneer may modify the delivery schedule (including with respect to the delivery date, the number of units to be delivered on a specified date, and the delivery locations from time to time by reasonable notice (at least two weeks) by Pioneer to S&W, provided that Pioneer must take delivery of all Inventory on or before March 31, 2021. The payments for the Inventory shall be due from Pioneer to S&W on the dates set forth in Schedule 2.1.2.2. For avoidance of doubt, change in the delivery schedule will not change the payment schedule in Schedule 2.1.2.2. The Inventory will be delivered from S&W’ s location in either Nampa or Five Points.

2.1.2.3 S&W represents that each lot of the Inventory has been tested for germination by an AOSA certified lab on the dates and with the results as set forth in Schedule 1.10. S&W shall retain records of such germination testing until at least March 31, 2022 and shall provide such records upon Pioneer’s request. If S&W does not provide the relevant records within ten business after Pioneer’s request or the relevant records for a given lot of Inventory do not match that set forth in Schedule 1.10, (a) if Pioneer has not already received such lot of Inventory, Pioneer shall not be obligated to purchase such lot of Inventory, or (b) if Pioneer has already received such lot of Inventory, S&W shall provide Pioneer with a refund for such lot of Inventory.

2.1.2.4 Pioneer must make any claim for shortage on a particular shipment of Inventory delivered within thirty days after Pioneer receives such shipment of Inventory from S&W. In the case of a shortage, the purchase price for the amount of Inventory not delivered will be either applied as a reduction in the final payment to S&W per Schedule 2.1.2.2 (if such payment has not yet been made at the time the shortage is reported) or after final reconciliation of payments for all shipments (if such payment has been made at the time the shortage is reported).

2.1.2.5 Ownership of the Inventory shall transfer from S&W to Pioneer upon delivery to Pioneer’s designated location. Subject to Section 2.1.2.3, Pioneer assumes all risk relating to germination of the Inventory; S&W assumes all other risk relating to the Inventory until ownership transfers to Pioneer. S&W shall not sell or otherwise transfer the Inventory to any third party. S&W shall hold any Inventory that involves traits licensed from FGI pursuant to Pioneer’s licensing from FGI.

2.1.2.6 The parties may negotiate a conditioning agreement relating to the Inventory in their discretion. Neither party has an obligation to enter into any such agreement.

2.1.3 Sequestered Varieties.

2.1.3.1 The Sequestered Varieties may not be sold until FGI provides consent to enable their sale. Pioneer will use reasonable efforts to obtain FGI’s consent to enable Pioneer and its affiliates to sell the Sequestered Varieties.

2.1.3.2 If FGI provides the necessary consent to enable sale of a given Sequestered Variety by Pioneer and its affiliates, Pioneer will have the option to purchase up to the amount of inventory of the Sequestered Variety listed on Schedule 1.14 at the purchase prices listed therein. Pioneer will make such payment within thirty days after conditioning.

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2.1.3.3 If FGI does not provide the necessary consent to enable Pioneer and its affiliatesto sell one or more Sequestered Varieties on or before October 31, 2019, Pioneer will have no obligation to purchase any such Sequestered Varieties. S&W may independently pursue consent from FGI to enable S&W to sell any Sequestered Varieties that Pioneer does not purchase (including consent for Pioneer to provide such Sequestered Varieties to S&W). If S&W obtains such consent from FGI, then Pioneer will deliver the Sequestered Varieties to S&W at S&W’s expense, and the parties will use reasonable efforts to negotiate a germplasm license to enable such sales by S&W. Unless otherwise agreed by the parties, Pioneer will hold any unpurchased Sequestered Varieties until December 31, 2019 and thereafter will destroy all inventory of such Sequestered Varieties at S&W’s expense (not to exceed $50,000).

2.2 Distribution Agreement.

2.2.1 Termination of Agreement. The parties hereby terminate the Distribution Agreement (including the Trademark License included as Appendix C to the Distribution Agreement) as of the Effective Date.

2.2.2 Payments satisfied. The parties agree that Pioneer’s payments under the Distribution Agreement are complete as of the Effective Date.

2.3 Production Agreement.

2.3.1 Termination of Agreement. The parties hereby terminate the Production Agreement as of the Effective Date.

2.3.2 Payments satisfied. The parties agree that Pioneer’s payments under the Production Agreement are complete as of the Effective Date.

2.4 Research Agreement.

2.4.1 Expiration of Agreement. The parties confirm the Research Agreement expired on February 28, 2018.

2.4.2 Completion of Certain Trials. S&W is currently managing, on behalf of Pioneer and under Pioneer’s license for all relevant traits, the research trials set forth on Schedule 2.4.2. S&W shall complete those trials pursuant to their approved protocols, and shall:

2.4.2.1 Permit Pioneer representatives access to the research trials, and such representatives may take samples from the plants during the course of the inspection;

2.4.2.2 Provide Pioneer with a copy of all data collected relating to the research trials; and

2.4.2.3 Provide Pioneer with forage-quality samples of alfalfa from the research trials as reasonably requested by Pioneer.

2.4.3 Payments Satisfied. The parties agree that Pioneer’s payments under the Research Agreement are complete as of the Effective Date.

4

3. License Agreement; Consideration.

3.1 The parties are contemporaneously executing the License Agreement.

3.2 In consideration for the mutual exchange herein and the rights granted in the License Agreement, Pioneer shall pay S&W forty-five million dollars ($45,000,000) within ten business days after the Effective Date.

3.3 Payment for the Inventory shall be made in the amounts and on the dates set forth in Schedule 2.1.2.2.

3.4 Funds payable to S&W under this Agreement shall be transferred pursuant to the wire instructions below:

Bank Name

Bank Address

Beneficiary NameS&W Seed Company

Account Number

Routing Number

Swift Code/ IBAN

4. Warranties and Disclaimer of Warranties.

4.1 Each party warrants that it is in good legal standing and has the authority to enter into this Agreement.

4.2 Other than as set forth in Subsection 2.1.2.3 and 4.1, NEITHER PARTY MAKES ANY, AND HEREBY SPECIFICALLY DISCLAIMS, ANY WARRANTIES, CONDITIONS, CLAIMS OR REPRESENTATIONS, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, IMPLIED CONDITIONS OR WARRANTIES OF QUALITY, PERFORMANCE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, NOR ARE THERE ANY WARRANTIES CREATED BY COURSE OF DEALING, COURSE OF PERFORMANCE, OR TRADE USAGE, UNDER THIS AGREEMENT.

5. General Provisions.

5.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement shall bear its respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the License Agreement, including all fees and expenses of agents, representatives, counsel and accountants.

5.2 Confidentiality. The terms (but not the existence) of this Agreement are confidential, and no party shall make public disclosures concerning the terms of this Agreement without obtaining the prior written consent of the other party, which consent shall not be unreasonably withheld. This obligation shall expire eight years after the Effective Date. Notwithstanding the foregoing, a party may disclose the terms of this agreement (a) to comply with law or regulation; rules of any stock exchange on which shares of a party or its Affiliate are listed; or in conformity with accounting

5

principles generally accepted in the United States; (b) in connection with an order or inquiry of a court or other government body, provided that the disclosing party provides the other party with notice and takes reasonable measure to obtain confidential treatment thereof; (c) in confidence to recipients’ Affiliates involved in the subject matter of this Agreement, attorneys, accountants, banks, and its advisors; or (d) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality terms commensurate with those set forth herein; or (e) to the extent the terms of this Agreement have previously been publicly disclosed in compliance with this Agreement.

5.3 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and shall be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) upon written confirmation of receipt when sent by facsimile transmission; provided, that a hard copy is mailed by registered mail, return receipt requested promptly thereafter or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties):

If to Pioneer:

Pioneer Hi-Bred International, Inc.

Attention: President

7100 N.W. 62nd Avenue

P.O. Box 1014

Johnston, IA 50131-1014

Fax:

With a copy to:

Pioneer Hi-Bred International, Inc.

Attention: General Counsel

7250 N.W. 62nd Avenue

P.O. Box 1014

Johnston, IA 50131-1014

Fax:

If to Buyer:

S&W Seed Company

106 K Street, Suite 300

Sacramento, CA 95814

Fax:

5.4 Dispute Resolution; Governing Law; Jurisdiction.

5.4.1 Any dispute between the parties arising out of or relating to this Agreement, or the interpretation, validity or effectiveness of this Agreement, or any provision of this Agreement, in the event the parties fail to agree, shall, upon the written request of a party, be referred to designated senior management representatives of the parties for resolution. Such representatives shall promptly meet and, in good faith, attempt to resolve the controversy, claim or issues referred to them.

6

5.4.2 If such representatives do not resolve the dispute within thirty (30) days after the dispute is referred to them, the dispute shall be settled by binding arbitration, in accordance with the Center for Public Resources (“CPR”) Rules for Non-Administered Arbitration of Business Disputes. For disputes in which the amount in controversy is less than or equal to U.S. $1,000,000, the parties shall mutually select one (1) neutral arbitrator who shall be qualified by experience and training to arbitrate commercial disputes. If the parties cannot agree on an arbitrator or if the amount in controversy exceeds U.S. $1,000,000, such dispute shall be settled by three (3) arbitrators who shall be qualified by experience and training to arbitrate commercial disputes, of whom each party involved in the arbitration shall appoint one, and the two appointees shall select the third, subject to meeting the qualifications for selection. If the parties have difficulty finding suitable arbitrators, the parties may seek assistance of CPR and its CPR Panels of Distinguished Neutrals. Judgment upon the award or other remedy rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of arbitration shall be in Wilmington, Delaware. The arbitrators shall apply the substantive law of the State of Delaware, without regard to its conflicts of law principles, and their decision thereon shall be final and binding on the parties. Discovery shall be allowed in any form agreed to by the parties, provided that if the parties cannot agree as to a form of discovery (i) all discovery shall be concluded within one hundred twenty (120) days of service of the notice of arbitration, (ii) each party shall be limited to no more than ten (10) requests for the production of any single category of documents, and (iii) each party shall be limited to two (2) depositions each with a maximum time limit that shall not exceed four (4) hours. Each party shall be responsible for and shall pay for the costs and expenses incurred by such party in connection with any such arbitration; provided, however, that all filing and arbitrators’ fees shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Seller. Each party does hereby irrevocably consent to service of process by registered mail, return receipt requested with respect to any such arbitration in accordance with and at its address set forth in Section 5.3 (as such address may be updated from time to time in accordance with the terms of Section 5.3). Any arbitration contemplated by this Section 5.4 shall be initiated by sending a demand for arbitration by registered mail, return receipt requested, to the applicable party in accordance with anu at we address set forth in the notice provision of this Agreement and such demand letter shall state the amount of relief sought by the party making the demand. This Agreement shall not be governed by the U.N. Convention on Contracts for the International Sale of Goods.

5.4.3 All proceedings and any testimony, documents, communications and materials, whether written or oral, submitted to or generated by the parties to each other or to the arbitration panel in connection with this Section 5.4 shall be deemed to be in furtherance of settlement negotiation and shall be privileged and confidential, and shielded from production in other Proceedings except as may be required by applicable law or regulation.

5.4.4 This Agreement shall be governed by the substantive laws of the State of Delaware, without regard to its conflicts of laws principles, and, except as otherwise provided herein, the State and Federal courts in the City of Wilmington, Delaware shall have exclusive jurisdiction over any Proceeding seeking to enforce any provision of, or based upon any right arising out of, this Agreement. The parties hereto do hereby irrevocably (i) submit themselves to the personal jurisdiction of such courts, (ii) agree to service of such courts’ process upon them with respect to any such proceeding, (iii) waive any objection to venue laid therein and (iv) consent to service of process by registered mail, return receipt requested to the address set forth in the notice provision of this Agreement.

7

5.4.5 The parties acknowledge and agree that the foregoing choice of law and forum provisions are the product of an arm’s-length negotiation between the parties.

5.4.6 Notwithstanding anything to the contrary in this Section 5.4, either party to this Agreement may seek, in the State or Federal courts in the City of Wilmington, Delaware, interim or provisional injunctive relief (or similar equitable relief) to maintain the status quo until such time as the designated senior management representatives of the parties resolve a dispute referred to them or an arbitration award or other remedy is entered in connection with such dispute pursuant to this Section 5.4 and, by doing so, such party does not waive any right or remedy available under this Agreement.

5.5 No Implied Waivers; No Jury Trial. Except as otherwise set forth herein, the rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT ALLOWED UNDER LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT.

5.6 Entire Agreement; Modification. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the License Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by both parties.

5.7 Assignments, Successors, and No Third-Party Rights.

5.7.1 Neither party may assign any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other party, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Pioneer may assign or transfer this Agreement to an Affiliate. This Agreement shall apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the parties. Any attempted assignment in violation of this Section 5.7.1 shall be void.

5.7.2 Unless otherwise expressly provided herein, nothing expressed or referred to in this Agreement shall be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

5.8 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall remain in full force and effect to the extent not held invalid or unenforceable.

5.9 Section Headings; Construction. The headings in this Agreement and Schedules and Exhibits attached hereto are provided for convenience only and shall not affect its construction or

8

interpretation. With respect to any reference made in this Agreement to a Section. All words usedin this Agreement shall be construed to be of such gender or number as the circumstances require.Unless otherwise expressly provided, the words "including", "include" and "includes" do not limitthe preceding words or terms and any list of words or terms following the words "including","include" and "includes" is not an exhaustive list. Any reference to a specific "day" or to a periodof time designated in "days" shall mean a calendar day or period of calendar days unless the dayor period is expressly designated as being a business day or period of business days. The use of"or" is not intended to be exclusive unless expressly indicated otherwise. All amountsdenominated in dollars or "$" in this Agreement are references to United States dollars unlessexpressly indicated otherwise. The parties hereto acknowledge and agree that (a) each party andits counsel have reviewed and negotiated the terms and provisions of this Agreement and havecontributed to its revision, (b) the rule of construction to the effect that any ambiguities areresolved against the drafting party shall not be employed in the interpretation of this Agreementand ( c) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto,regardless of which party was generally responsible for the preparation of this Agreement.

IN WITNESS THERETO, the parties have executed this Termination Agreement.

PIONEER HI-BRED INTERNATIONAL, INC.

By:/s/ James C. Collins

Title:  Executive Vice President

Date:  May 22, 2019

S & W SEED COMPANY

By:/s/ Mark W. Wong

Title:  Chief Executive Officer

Date:  May 22, 2019

9

Schedule 1.5

Grower Agreements

[***]

Schedule 1.9

Inventory

[***]

Schedule 1.14

Sequestered Varieties

[***]

Schedule 2.1.1.1

Form of Grower Notice

[***]

Schedule 2.1.2.2

Delivery and payment Schedule for Inventory

September 15, 2019	22.2%	$   5,551,371.52
January 15, 2020	22.2%	$   5,551,371.52
February 15, 2020	22.2%	$   5,551,371.52
September 15, 2020	15.0%	$   3,750,926.70
January 15, 2021	10.0%	$   2,500,617.80
February 15, 2021	8.4%	$   2,100,518.95
	100.0%	$ 25,006,178.00

Schedule 2.4.2

Research Trials

[***]

EX-10.32

Exhibit 10.32

[***] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both not material and would likely be competitively harmful if publicly disclosed.

Alfalfa License Agreement

This Alfalfa License Agreement (“Agreement”), effective May 20, 2019 (“Effective Date”), is by and between Pioneer Hi Bred International, Inc., a company organized and existing under the laws of the State of Iowa, with its principal place of business at 7100 NW 62nd Avenue, PO Box 1014, Johnston, Iowa 50131 1014, USA (“Licensee”), and S & W Seed Company, a company organized and existing under the laws of the State of Nevada, with its principal place of business at 106 K Street, Suite 300, Sacramento, CA 95814, USA (“Licensor”), (Licensee and Licensor referred to individually as a “Party” and collectively as the “Parties”).

WHEREAS, Licensee desires to acquire a license to certain Licensor alfalfa seed; and

WHEREAS, Licensor is the owner of certain alfalfa germplasm and is willing to grant such a license, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, promises and consideration hereinafter set forth, the sufficiency of which is acknowledged by the Parties, the Parties agree as follows

1. Definitions.

In this Agreement, unless the context otherwise requires, initially capitalized terms shall have the meaning ascribed thereto herein, including the following terms which shall have the following meanings

1.1 “Affiliate(s)” means with respect to an entity, any other entity that, directly or indirectly through one or more intermediates, Controls, is Controlled by or is under Common Control with another entity. Any entity that becomes an Affiliate after the Effective Date shall be deemed an Affiliate under this Agreement.

1.2 “Control,” “Controls,” “Controlled by,” and “under common Control” shall mean (a) the ownership, directly or indirectly, whether through one or more intermediaries, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest in the case of any other type of legal entity, (b) status as a general partner in any partnership, or (c) any other arrangement by which an entity has, directly or indirectly, the power to direct or cause the direction of the management and policies of another entity.

1.3 “Cover” means, with respect to a given plant variety, that the unauthorized performance of any of the acts enumerated in Article 14 of the 1991 Act of the International Convention for the Protection of New Varieties of Plants or similar acts as may be provided under other applicable statutory protection systems for plant varieties (as limited by Articles 15 to 17 thereof) in respect of such variety, would infringe the breeder’s right in respect of such variety.

1.4 “Licensed Alfalfa” means the selected alfalfa commercial and pre commercial varieties/germplasm listed in Annex A of this Agreement, hereinbelow.

1.5 “Licensee Brands” means any brand owned by Licensee or its Affiliates, but excluding Dairyland and Mycogen.

1.6 “Person” means any individual, corporation, proprietorship, firm, partnership, limited-

1

liability company, trust, estate, association, organization, cooperative or other form of business or governmental entity, whether natural or legal.

1.7 “Statutory Right(s)” means all patents, patent applications, plant patents, plant patent applications, PVP rights (including both PVP certificates and PVP applications), and all related continuations, continuations in part, divisionals, reissues, re examinations, substitutions, and extensions thereof owned by Licensor and/or its Affiliates now or in the future to the extent that they Cover the corresponding Licensed Alfalfa, including all continuations, continuations in part, divisionals, re examinations and reissues thereof, and all rights and remedies against past, present, and future infringement, misappropriation, or other violation thereof.

1.8 “Technical Information” means the information listed in Annex B.

1.9 “Termination Agreement” means the termination agreement between Licensor and Licensee executed contemporaneously herewith.

1.10 “Territory” means worldwide excluding South America.

1.11 “Third Party” means any Person, organization, firm, corporation, partnership, or entity other than Licensee and Licensor and their respective Affiliates.

Interpretation of this Agreement shall be governed by the following rules of construction

a) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender unless otherwise specified;

b) references to the terms Article, Section, paragraph, clause, Exhibit and Annex are references to the Articles, Sections, paragraphs, clauses, Exhibits and Annexes of this Agreement, unless otherwise specified;

c) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement; and

d) the word “including,” “includes,” and words of similar import when used in this Agreement shall mean “including, without limitation,” “includes, without limitation” or words of similar import, unless otherwise specified.

e) The headings in this Agreement are for convenience only and shall not affect its interpretation.

2. Grant of License.

2.1 Subject to the terms of this Agreement, Licensor grants to Licensee and Licensee’s Affiliates, in the Territory, the following irrevocable, perpetual, royalty free, fully paid up, sublicensable, and transferable (as set forth in Section 10 below) rights, under Licensor’s Statutory Rights and other intellectual property as set forth below

a. a non exclusive right to make, have made, import, have imported, use, and have used Licensed Alfalfa;

b. an exclusive right, including as to Licensor, to sell, have sold, offer for sale and have offered for sale Licensed Alfalfa in Licensee Brands;

c. the right to apply for Statutory Rights for Licensed Alfalfa;

Page 2 of 11

d. an exclusive right to enforce Statutory Rights covering Licensed Alfalfa in Licensee’s sole discretion, as more fully described in section 5.3 below.

2.2 For clarity, Licensee may use contractors to exercise the licenses granted hereunder.

2.3 Licensor acknowledges and understands that as part of the regular conduct of Licensee’s research program, Licensee routinely utilizes molecular techniques, molecular markers and other techniques, which shall be allowed under this Agreement.

2.4 Licensor shall, within ten days after the Effective Date, provide Licensee with all Technical Information relating to Licensed Varieties existing as of the Effective Date. Licensor shall also provide Licensee with any additional Technical Information generated by Licensor on or before January 31, 2020 within ten days after generation of any such Technical Information. Licensor grants Licensee the right to use such Technical Information in connection with the rights granted herein to Licensed Varieties.

3. Restrictions on Use.

3.1 Each Party shall comply with all national, state and local laws and regulations relating to such Party’s activities under this Agreement.

3.2 No license is granted to either Party by this Agreement, by implication or otherwise, except as otherwise expressly provided for in this Agreement.

3.3 Subject to Section 3.5, no rights are granted herein to breed with Licensed Alfalfa.

3.4 Nothing in this Agreement shall be interpreted as providing a Party the right to use the trade name, trademarks or service marks of the other Party or its Affiliates in any advertising, publicity, news release, product labelling or for any commercial purpose, without the prior written consent of such other Party with the exception of use required in order to exercise rights hereunder.

3.5 Notwithstanding any other provision in this Agreement, no provision herein shall be deemed to limit any rights to Licensed Alfalfa Licensee or its Affiliates may have to make, use, sell, import, export and/or otherwise exploit Licensed Alfalfa in any way legally permissible under the laws of the jurisdiction in which such activities are conducted, to the extent an independent Third Party could legally do the same absent a license or other grant of rights from Licensor.

4. Inventory of Licensed Alfalfa.

4.1 Licensor shall sell and Licensee shall purchase certain inventory of Licensed Alfalfa as specified in the Termination Agreement.

5. Intellectual Property Rights

5.1 All right, title and interest in and to the Technical Information shall be and remain with Licensor.

5.2 All right, title and interest in and to data relating to Licensed Alfalfa generated by Licensee

Page 3 of 11

shall be and remain with Licensee.

5.3 Licensee shall have the exclusive right in the Territory (but not the obligation) to institute and conduct legal action against Third Parties for infringement related to Statutory Rights Covering Licensed Alfalfa, and to enter into settlement agreements as may be deemed appropriate by Licensee. Licensor shall provide commercially reasonable assistance (including providing data, witnesses, and documents to Licensee or its Affiliates, and, if required by law, subject to Licensee’s control and at Licensee’s expense, being a named party to any proceeding or bringing a proceeding in its own name) to Licensee and its Affiliates in connection with any proceedings or other efforts to enforce Licensee’s rights in connection with any such infringement. Licensee shall receive the full benefits, including any and all monetary recoveries, whether as compensatory or exemplary damages, of any proceeding or settlement for such infringement of such Licensed Alfalfa pursuant to this Section.

5.4 Licensor agrees to in a timely manner

a. execute such documents as may be requested by Licensee to confirm Licensee’s ownership of Licensee’s Statutory Rights applied for pursuant to Section 2.1c); and

b. at the reasonable request and expense of Licensee, to co operate reasonably with Licensee in any efforts to register, maintain or enforce Licensee’s Statutory Rights applied for pursuant to Section 2.1c); and

c. require Licensor’s employees to do the same.

6. Term and Termination.

6.1 Term. The term of this Agreement shall commence as of the date hereof and shall continue thereafter until expiration of this Agreement, which shall occur upon the last to expire of Statutory Rights Covering Licensed Alfalfa, provided that the obligations in Subsection 5.3 shall survive until the end of the applicable statute of limitations.

6.2 For the avoidance of doubt, all Licensee’s rights to Licensed Alfalfa and Technical Information shall survive expiration of this Agreement.

7. Warranties and Indemnifications.

7.1 Licensor warrants that, to the best of its knowledge, it has full power and authority, and sufficient rights to grant the rights and license granted by this Agreement.

7.2 Licensor represents and warrants that the terms of this Agreement do not conflict with any
other contractual obligations it may have. Licensor specifically represents and warrants that
any genetic material introduced into the Licensed Alfalfa by Licensor (or third parties acting
on its behalf) during the period from January 1, 2015 through the Effective Date was
introduced in compliance with the International Treaty for PGRFA, the Convention on
Biological Diversity, and the principles of Prior Informed Consent and Access and Benefit

Page 4 of 11

Sharing. Licensor further represents and warrants that it has not previously granted a license to sell, have sold, offer for sale, or have offered for sale Licensed Alfalfa to a Third Party.

7.3 Licensor represents and warrants that the Licensed Alfalfa and related data provided to Licensee shall be identified accurately.

7.4 BOTH PARTIES EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, CONDITIONS, CLAIMS OR REPRESENTATIONS, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT LIMITATION, IMPLIED CONDITIONS OR WARRANTIES OF QUALITY, PERFORMANCE, NON INFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, NOR ARE THERE ANY WARRANTIES CREATED BY COURSE OF DEALING, COURSE OF PERFORMANCE, OR TRADE USAGE, UNDER THIS AGREEMENT.

8. Government Registration.

8.1 Licensee shall, at its own expense, be responsible for obtaining from the relevant government authorities all registrations, approvals and/or consents and fulfilling all other requirements and completing all procedures related to this Agreement that are or may in the future be required or advisable under any law or regulation now or hereafter existing in the Territory as relates to any Licensed Alfalfa under this Agreement, provided, however, that Licensor shall, within ten business days after the Effective Date, assign all phytosanitary certificates and applications (and other similar regulatory applications), in each case to the extent relating to the Territory, that Licensor holds for Licensed Alfalfa.

9. Assignment.

9.1 Neither Party may assign or otherwise transfer this Agreement without the consent of the other, except that either Party may, without such consent, by written notice to the other Party, assign this Agreement to one of its Affiliates.

9.2 Upon any such assignment referred to in this Section 10 the rights and obligations under this Agreement shall be binding upon and inure to the benefit of said assignee.

9.3 Any purported assignment or delegation in breach of this section 10 will be void.

10. Force Majeure.

10.1 Neither of the parties shall be liable for any default or delay in performance of any obligation under this Agreement to the extent caused by any of the following Act of God, war, riot, fire, explosion, drought, wind, accident, flood, sabotage, compliance with governmental requests, laws, regulations, orders or actions, national defense requirements or any other event beyond the reasonable control of such party, or labor trouble, strike, lockout or injunction (provided that neither of the parties shall be required to settle a labor dispute against its own best judgment).

10.2 The party invoking this Section 10 shall give the other party written notice and full particulars of such force majeure event.

Page 5 of 11

10.3 Both Parties shall use reasonable business efforts to mitigate the effects of any force majeure on their respective part.

11. Miscellaneous.

11.1 Notices. Any notice or other communication required or permitted to be given by any Party under this Agreement shall be given in writing and shall be effective when delivered, if delivered by fax, hand, reputable courier service or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to each Party at the following addresses or such other address as may be designated by notice pursuant to this Section 11.1

If to Licensor

S&W Seed Company
106 K Street, Suite 300
Sacramento, CA 95814 U.S.A.

If to Licensee

Pioneer Hi Bred International, Inc.
7100 NW 62nd Avenue, PO Box 1014
Johnston, Iowa 50131 1014

Attention:

11.2 Relationship of the Parties. The relationship of the Parties to this Agreement is strictly contractual, and the Parties hereto acknowledge that this Agreement does not create a joint venture, partnership, or the like, between them. No Party to this Agreement shall have any authority to employ any person as an employee or agent for or on behalf of any other Party for any purpose, and no Party to this Agreement, nor any person performing any duties or engaging in any work at the request of such Party, shall be deemed to be an employee or agent of any other party hereto.

11.3 Confidentiality. The terms (but not the existence) of this Agreement are confidential, and no Party shall make public disclosures concerning the terms of this Agreement without obtaining the prior written consent of the other Party, which consent shall not be unreasonably withheld. This obligation shall expire eight years after the Effective Date. Notwithstanding the foregoing, a Party may disclose the terms of this agreement (a) to comply with law or regulation; rules of any stock exchange on which shares of a Party or its Affiliate are listed; or in conformity with accounting principles generally accepted in the United States; (b) in connection with an order or inquiry of a court or other government body, provided that the disclosing Party provides the other Party with notice and takes reasonable measure to obtain confidential treatment thereof; (c) in confidence to recipients’ Affiliates involved in the subject matter of this Agreement, attorneys, accountants, banks, and its advisors; or (d) in confidence, in connection with the sale of substantially all the business assets to which this Agreement relates, so long as, in each case, the entity to which disclosure is made is bound to confidentiality terms commensurate with those set forth herein.

Page 6 of 11

11.4 Fees. Except as otherwise provided herein, each Party to this Agreement shall bear its own legal fees incurred in connection with the transactions contemplated hereby.

11.5 Further Assurances. The Parties hereto shall execute such further documents and perform such further acts (and generally cooperate with each other) as may be necessary to comply with the terms of this Agreement and consummate the transactions herein provided such acts are reasonable and at the expense of the requesting Party.

11.6 Remedies. Except as otherwise expressly stated in this Agreement, the rights and remedies of a Party set forth herein with respect to failure of the other to comply with the terms of this Agreement (including rights of full termination of this Agreement) are not exclusive, the exercise thereof shall not constitute an election of remedies and the aggrieved Party shall in all events be entitled to seek whatever additional remedies may be available.

11.7 Construction. This Agreement has been negotiated by the Parties hereto and their respective counsel. This Agreement shall be interpreted in accordance with its terms and without any strict construction in favor of or against any Party. This Agreement shall not be construed in favor of or against any Party by reason of the authorship of any provisions hereof.

11.8 No Third Party Beneficiaries. Except as expressly set forth in this Agreement, the terms of this Agreement are not intended to confer any rights or remedies upon, and shall not be enforceable by, any person or entity other than the Parties.

11.9 Affiliates. The Parties will cause their respective Affiliates to abide by and act in accordance with the terms of this Agreement and any rulings of any court before which a judicial proceeding is heard. Any act or omission of an Affiliate of a Party which would be a breach of this Agreement if by a Party shall be deemed to be a breach by such Party.

11.10 Waiver. No failure by any Party to insist upon the strict performance of any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy upon a breach of such or any other covenant, agreement, term or condition of this Agreement shall operate as a waiver of such or any other covenant, agreement, term or condition of this Agreement. No waiver of any covenant, agreement, term or condition of this Agreement shall affect or alter the remainder of this Agreement, and each and every covenant, agreement, term and condition of this Agreement shall continue in full force and effect with respect to any other then existing or subsequent breach of this Agreement. No waiver of any covenant, agreement, term or condition of this Agreement shall be of any force or effect unless set forth in a writing signed by each Party to this Agreement.

11.11 Counterparts. This Agreement may be executed by the Parties in multiple counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. All signatures need not be on the same counterpart.

11.12 Severability. To the extent permitted by applicable law, each provision of this Agreement shall be considered separable, and if for any reason any provision or provisions thereof are determined to be invalid and contrary to any applicable law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.

11.13 Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware without regard to principles of conflicts of

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law.

11.14 Entire Agreement, Amendments. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the Termination Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by both parties.

[Signatures on following page]

Page 8 of 11

IN TESTIMONY WHEREOF, Licensee and Licensor have entered into this Agreement effective as of the Effective Date. The individuals signing below on behalf of Licensee and Licensor represent that they are authorized to sign on behalf of Licensee and Licensor, respectively, and indicate the acceptance of all of the terms of this Agreement.

SIGNED for and on behalf of PIONEER HI BRED INTERNATIONAL, INC. by

Signature /s/ James C. Collins

Name: James C. Collins

Title:    Executive Vice President

Date:   May 22, 2019

SIGNED for and on behalf of S&W SEED COMPANY by

Signature /s/ Mark W. Wong

Name: Mark W. Wong

Title:    Chief Executive Officer

Date:   May 22, 2019

Page 9 of 11

Annex A

Licensed Alfalfa

[***]

Page 10 of 11

Annex B

Technical Information

[***]

Page 11 of 11

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF

S&W SEED COMPANY,

Nevada corporation

Pasture Genetics Pty Ltd, an Australia corporation (wholly-owned by S&W Seed Company Australia Pty Ltd)

Seed Holding, LLC, a Nevada limited liability company

Stevia California, LLC, a California limited liability company

S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd)

S&W Seed Company Australia Pty Ltd, an Australia corporation (f/k/a Seed Genetics International Pty Ltd) (wholly-owned by S&W Holdings Australia Pty Ltd)

Seed Vision (PTY) LTD, a South Africa proprietary limited company

Sorghum Solutions South Africa (PTY) LTD, a South Africa proprietary limited company

S&W Seed Hungary Korlátolt Felelősségű Társaság (KFT), a Hungary limited liability company

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-3 (File Nos. 333-229624, 333-222916, 333-219726, 333-208679, and 333-201797) and Form S-8 (File Nos. 333-229625, 333-196067 and 333-169742) of S&W Seed Company of our report dated September 23, 2020 relating to the consolidated financial statements, appearing in this Annual Report on Form 10-K.

/s/ Crowe LLP

Crowe LLP

Sacramento, California

September 23, 2020

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Mark W. Wong, certify that:

1. I have reviewed this report on Form 10-K of S&W Seed Company (the "registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this  report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 23, 2020

/s/ Mark W. Wong

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Matthew K. Szot, certify that:

1. I have reviewed this report on Form 10-K of S&W Seed Company (the "registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this  report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 23, 2020

/s/ Matthew K. Szot

Executive Vice President of Finance and

Administration and Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of S&W Seed Company (the "Company") for the fiscal year ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Mark W. Wong, President and Chief Executive Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 23, 2020

/s/ Mark W. Wong

Mark W. Wong

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of S&W Seed Company (the "Company") for the fiscal year ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Matthew K. Szot, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 23, 2020

/s/ Matthew K. Szot

Matthew K. Szot

Executive Vice President of Finance and

Administration and Chief Financial Officer

(Principal Financial and Accounting Officer)

XML

Leases

12 Months Ended

Jun. 30, 2020

Lessee Disclosure [Abstract]

LEASES

NOTE 3 - LEASES

S&W leases office and laboratory space, field research plots and equipment used in connection with its operations under various operating and finance leases.

ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the net present value of the Company’s obligation to make payments arising from these leases. The lease liabilities are based on the present value of fixed lease payments over the lease term using the implicit lease interest rate or, when unknown, the Company's incremental borrowing rate on the lease commencement date or July 1, 2019 for leases that commenced prior to that date. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less ("short-term leases") are not recorded on the accompanying consolidated balance sheet.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component under the practical expedient provisions of the standard. The Company has lease agreements with terms less than one year. For the qualifying short-term leases, the Company elected the short-term lease recognition exemption in which the Company will not recognize ROU assets or lease liabilities, including the ROU assets or lease liabilities for existing short-term leases of those assets in upon adoption.

Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities.  Variable lease payments and short-term lease expenses were immaterial to the Company’s financial statements for the year ended June 30, 2020. The Company’s lease agreements do not contain material restrictive covenants.

The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification	June 30, 2020
Assets:
Right of use assets - operating leases	Other assets	$	4,137,255
Right of use assets - finance leases	Other assets	$	1,504,109
Accumulated amortization - finance leases	Other assets		(340,100	)
Right of use assets - finance leases, net	Other assets		1,164,009
Total lease assets		$	5,301,264
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	809,632
Current lease liabilities	Accrued expenses and other current liabilities		1,197,874
Long-term debt, net	Long-term debt, net		1,642,975
Long-term lease liabilities	Other non-current liabilities		3,242,548
Total lease liabilities		$	6,893,029

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended          June 30, 2020
Operating lease cost	Cost of revenue	$	299,126
Operating lease cost	Selling, general and administrative expenses		647,587
Operating lease cost	Research and development expenses		209,140
Finance lease cost	Depreciation and amortization and Interest expense		482,390
Total lease costs		$	1,638,243

Maturities of lease liabilities as of June 30, 2020 are as follows:

	Operating Leases			Finance Leases
2021	$	1,328,827		$	947,499
2022		1,130,311			863,678
2023		831,743			744,059
2024		762,849			139,808
2025		377,901		$	—
After 2025		483,792		$	—
Total lease payments		4,915,423			2,695,044
Less: Interest	$	(475,001	)	$	(242,437	)
Present value of lease liabilities	$	4,440,422		$	2,452,607

Future minimum lease payments for operating leases accounted for under ASC 840, “Leases” in excess of one year at June 30, 2019 were as follows:

	June 30, 2019
2020	$	640,135
2021		634,422
2022		352,730
2023		201,800
2024		235,776
After 2024		366,581
Total	$	2,431,444

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2020:

Operating lease remaining lease term	3.8 years
Operating lease discount rate		4.53	%
Finance lease remaining lease term	3.0 years
Finance lease discount rate		5.90	%
Cash paid for operating leases	$	875,317
Cash paid for finance leases	$	858,365

XML

Pioneer Relationship

12 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

PIONEER RELATIONSHIP

NOTE 4 – PIONEER RELATIONSHIP

Distribution and Production Agreements with Pioneer

In 2014, the Company purchased from Pioneer certain assets related to alfalfa and entered into a long-term contract to sell alfalfa seed to Pioneer under a production agreement (GMO varieties) and a distribution agreement (conventional varieties). Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer.  See Note 5 for a discussion of the recognition of revenue under these agreements.  

On May 22, 2019, the Company and Pioneer terminated the production and distribution agreements.  As part of the termination, Pioneer’s parent company, Corteva, agreed to purchase from the Company certain quantities of seed held by the Company as of that date that Pioneer was not previously obligated to purchase. Those quantities of seed will be delivered to Corteva periodically through February 2021.  

The Company does not expect to sell any other products to Pioneer or Corteva beyond those quantities of seed.  

In conjunction with the termination of the Pioneer production and distribution agreements, the Company recorded a $6.0 million impairment charge on its intangible assets related to the Pioneer distribution agreements for the year ended June 30, 2019. In addition, the termination of this relationship was a significant factor leading to the $11.9 million impairment of goodwill.  

License Agreement with Corteva

Contemporaneously with the termination, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. The Company also assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.  Corteva received no license to the Company's other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by the Company.

Payments Due from Corteva and Pioneer

The Company received a payment of $45.0 million in May 2019, $5.55 million in September 2019, $5.55 million in January 2020, and $5.55 million in February 2020 from Pioneer/Corteva, and will receive quarterly payments through February 2021, which total approximately $8.4 million.  Approximately $34.2 million of these amounts referenced above has been allocated to the license to the Company’s alfalfa varieties. The $34.2 million is reported as licensing revenue in the consolidated statement of operations for the year ended June 30, 2019.  

The remaining amounts will be recognized as revenue as the seed is delivered to Corteva through February 2021.  The amount allocated to the seed represents the estimated standalone selling price of those quantities of seed, determined based on the Company’s normal profit margin on the quantities and varieties of seed that Corteva agreed to purchase.  The Company allocated approximately $1.8 million to an unbilled receivable related to revenue recognition at contract termination and the remainder of the payments was allocated to the license using a residual method approach.

XML

Revenue Recognition

12 Months Ended

Jun. 30, 2020

Revenues [Abstract]

REVENUE RECOGNITION

NOTE 5 - REVENUE RECOGNITION

The Company derives its revenue from 1) the sale of seed, 2) milling and packaging services 3) research and development services and 4) product licensing agreements.

The following table disaggregates the Company's revenue by type of contract¹:

	Years Ended June 30,
	2020		2019
Pioneer product sales	$	19,681,450	$	37,605,215
Other product sales		57,896,346		37,647,297
Licensing		-		34,215,433
Services		2,004,402		254,566
	$	79,582,198	$	109,722,511

For the year ended June 30, 2020, Pioneer product sales consisted of product shipments to Pioneer under the termination agreement discussed in Note 4.

For the year ended June 30, 2019, Pioneer product sales consisted of revenue under the Distribution and Production Agreements.

Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer. The Company concluded that none of the individual activities performed under these contracts were distinct, as the customer was contracting for processed and packaged product.

Until those contracts were terminated in May 2019 (see Note 4), Pioneer submitted a demand plan to the Company in advance of the growing season specifying the amount of seed that it intends to order for the upcoming sales year. The Company was required to use commercially reasonable efforts to arrange for the requisite amount of seed to be grown, processed and packaged. Once the demand plan was submitted, Pioneer was committed to at least that amount of seed. In addition, the Company was not permitted to sell products produced for Pioneer under the agreements to other customers. Therefore, as provided in Topic 606, the Company recognized revenue from these agreements over time in 2019, as it incurred costs to fulfill its obligations.

To the extent the Company produced more product than Pioneer specified in its demand plan, the Company was required to first offer such product to Pioneer. If Pioneer did not purchase such excess product, the Company was permitted to sell the excess product to other customers subject to certain limitations.

The agreements specified prices per finished unit which were adjusted each year, up or down, based on current market conditions, by a maximum of 4% per year. The prices for a given crop year were determined one year in advance of the beginning of the sales season.

The Company concluded that cost was the best measure of progress under these contracts because no other measure adequately reflected the value added to the product by each of the Company's major tasks - having the crop grown, processing, and packaging. As the Company typically contracted out the growing of seed to third parties, the vast majority of the Company's costs under these agreements were incurred, and therefore the vast majority of the revenue from such agreements was recognized, when the raw seed was purchased from the third-party contract growers. The rest of the costs were incurred, and therefore the rest of the revenue was recognized, as the Company processed and packaged the product.  As of the date of the termination of the production and distribution agreements with Pioneer (see Note 4), all seed covered by the active demand plan had been grown, processed and packaged.

Licensing

Contemporaneously with the termination in Note 4, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties.

Other Product Sales

Revenue from other product sales is recognized at the point in time at which control of the product is transferred to the customer. Generally, this occurs upon shipment of the product. Pricing for such transactions is negotiated and determined at the time the contracts are signed. We have elected the practical expedient that allows us to account for shipping and handling activities as a fulfillment cost, and we accrue those costs when the related revenue is recognized.

The Company has certain contracts with customers that offer a limited right of return on certain branded products. The products must be in an unopened and undamaged state and must be resalable in the sole opinion of the Company to qualify for refund.  Returns are only accepted on product received by August 31^st of the current sales year.  The Company uses a historical returns percentage to estimate the refund liability and records a reduction of revenue in the period in which revenue is recognized.

Services

Revenue from milling services, which are performed on the customer's product, is recognized as services are completed and the milled product is delivered to the customer.

Revenue from conditioning, treating, and packaging services is recognized over time as the services are performed.  Revenue from research and development services is recognized over time as the services are performed. R&D services are generally paid for in advance. In fiscal 2019, R&D revenue relates to a single contract in which the customer may decide annually whether to continue the arrangement. Revenue is recognized straight-line over time, as services are expected to be provided roughly evenly throughout the year.

Payment Terms and Related Balance Sheet Accounts

Accounts receivable represent amounts that are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 120 days for export customers and end of sales season (September 30^th) for branded products sold within the United States. As the period between the transfer of goods and/or services to the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in its contracts with customers.

Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract but is not yet able to invoice the customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements with Pioneer for which the Company recognized revenue over time, as the Company bills for these arrangements upon product delivery, while revenue was recognized, as described above, as costs were incurred. Unbilled receivables may arise as much as three months before billing is expected to occur. Unbilled receivables are generally expected to be generated in the first and second fiscal quarters, and to be billed in the second, third and fourth fiscal quarters.

Losses on accounts receivable and unbilled receivables are recognized if and when it becomes probable that amounts will not be paid. These losses are reversed in subsequent periods if these amounts are paid. During the year ended June 30, 2020, the Company recognized a net gain from collections on amounts previously written off to bad debt expense of $255,000.  During the period ended June 30, 2019, the Company recognized bad debt expense of $996,461 associated with impaired accounts receivable.  

Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation.  During the year ended June 30, 2020, the Company recognized $9.1 million of revenue that was included in the deferred balance as of June 30, 2019. During the year ended June 30, 2019, the Company recognized $0.2 million of revenue that was included in the deferred balance as of June 30, 2018.

XML

Business Combinations

12 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

BUSINESS COMBINATIONS

NOTE 6 - BUSINESS COMBINATIONS

Chromatin Acquisition

On October 25, 2018, the Company completed the acquisition of substantially all of the assets of Chromatin, Inc., or together with certain of its subsidiaries and affiliates in receivership, Chromatin, as well as the assumption of certain contracts and limited specified liabilities of Chromatin, for an aggregate cash purchase price of approximately $26.5 million, or the Acquisition, pursuant to the terms of its Asset Purchase Agreement, dated September 14, 2018, with Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, or Novo.

The acquisition expanded the Company's sorghum production capabilities, diversified its product offerings and provided access to new distribution channels.

The Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the Acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of October 25, 2018:

	October 25, 2018
Cash and cash equivalents	$	95,049
Accounts receivable		947,015
Inventories		6,959,936
Prepaid expenses and other current assets		16,501
Property, plant and equipment		10,193,620
Assets held for sale		1,930,400
In-process research and development		380,000
Technology/IP - germplasm		7,200,000
Trade names		150,000
Goodwill		1,573,546
Current liabilities		(2,881,198	)
Noncurrent liabilities		(114,869	)
Total acquisition cost allocated	$	26,450,000

Management determined that one of the facilities acquired as part of the Chromatin acquisition would not be operated and is being held for sale. The components of that facility are:

Land and improvements	$	320,000
Buildings and improvements		1,380,000
Machinery and equipment		332,000
Less: Costs to sell		(101,600	)
Less: Fair value adjustment subsequently recorded		(1,316,093	)
Assets recorded as held for sale that have been subsequently sold	$	614,307

Management expected the sale to be completed within 12 months and planned to pay down a portion of the Company's short-term debt with the proceeds, accordingly, these held for sale assets are presented as current assets. In November 2019, the Company completed the sale of land and buildings of this facility and received net proceeds of $614,307.

The estimated fair value of accounts receivable acquired is $947,015, with the gross contractual amount totaling $2,164,476, less $1,217,461 expected to be uncollectible. The current liabilities assumed relate to inventory acquired in the acquisition as well as customer deposits. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,573,546, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology, and the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.

Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method, the multi-period excess earnings method, and the replacement cost method. In-process research and development costs are being accounted for as an indefinite lived intangible asset subject to impairment testing until completion or abandonment of research and development efforts associated with the in-process projects. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization.

The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)	Estimated Fair Value
In-process research and development	n/a	$	380,000
Technology/IP - germplasm	30		7,200,000
Trade names	5		150,000
Total identifiable intangible assets		$	7,730,000

The Company incurred acquisitions costs of $1,196,476 during the year ended June 30, 2019 that have been recorded in selling, general and administrative expenses on the consolidated statement of operations. The results of the Chromatin acquisition are included in our consolidated financial statements from the date of acquisition through June 30, 2019. The revenue and net loss (including transaction costs) of Chromatin operations included in our consolidated statements of operations were $12.4 million and $1.7 million, for the period from October 25, 2018 through June 30, 2019.

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Year Ended June 30,
	2019
Revenue	$	111,359,688
Net loss	$	(11,179,299	)

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 includes (i) the elimination of acquisition charges of $1,196,476; (ii) amortization of acquired intangibles of $132,222; and (iii) depreciation of acquired property, plant and equipment of $358,273.

Pasture Genetics Acquisition

On February 24, 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics, the PG Acquisition, for an initial consideration that consisted of an upfront cash payment at closing of USD $7.5 million (AUD $11.4 million). A potential earn-out payment of up to USD $5.3 million (AUD $8.0 million), or the Earn-Out, is payable on September 30, 2022, or the Earn-Out Date. The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5 multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $11.4 million). At S&W Australia’s election, up to 50% of the Earn-Out may be paid in shares of our common stock at a per share purchase price equal to the volume-weighted average purchase price of the Company’s common stock during the 10-day period ending immediately prior to the Earn-Out Date.

The PG acquisition expanded and diversified the Company's product offerings and provided access to new distribution channels within Australia.

The PG Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the Acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the

acquisition date of February 24, 2020:

	February 24, 2020              (as reported)			Measurement Period Adjustments			February 24, 2020             (as adjusted)
Cash and cash equivalents	$	25,027		$	—		$	25,027
Accounts receivable		3,406,169			94,749			3,500,918
Inventories		6,145,876			(74,473	)		6,071,403
Prepaid expenses and other current assets		191,536			13,625			205,161
Property, plant and equipment		993,525			—			993,525
Right of use assets		—			365,033			365,033
Trade names		428,590			(26,375	)		402,215
Customer relationships		4,351,840			791,244			5,143,084
Goodwill		2,555,175			(1,102,739	)		1,452,436
Accounts payable		(4,254,043	)		219,932			(4,034,111	)
Current liabilities		(1,452,984	)		159,865			(1,293,119	)
Vehicle loans		(544,608	)		-			(544,608	)
Finance leases assumed		-			(365,033	)		(365,033	)
Other noncurrent liabilities		(16,399	)		-			(16,399	)
Total acquisition cost allocated	$	11,829,704		$	75,828		$	11,905,532

The acquisition-date fair value of the consideration transferred consisted of the following:

	February 24, 2020              (as reported)		Measurement Period Adjustments		February 24, 2020             (as adjusted)
Cash paid at closing	$	7,497,645	$	-	$	7,497,645
Contingent earn-out		4,332,059		75,828		4,407,887
Total purchase price	$	11,829,704	$	75,828	$	11,905,532

The estimated fair value of accounts receivable acquired was $3,500,918, with the gross contractual amount totaling $3,610,566, less $109,648 expected to be uncollectible. The current liabilities assumed primarily relate to grower payables as well as employee-related obligations. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,452,436, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to manage the acquired business, the trained workforce and access to new the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.

Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method and the multi-period excess earnings method. The contingent consideration requires the Company to pay up to an additional USD $5.3 million (AUD $8.0 million).  The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5 multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $12.0 million).  The fair value of the contingent consideration arrangement at the acquisition date was $4,407,887. The fair value of the contingent consideration was estimated using a Monte Carlo simulation model. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions in applying the Monte Carlo simulation were as follows: 8% present value discount factor and an underlying net income volatility of 35%. As of June 30, 2020, the estimated fair value of the contingent consideration is $4,095,702. The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)		Estimated Fair Value
Trade names		5	$	402,215
Customer Relationships		20		5,143,084
Total identifiable intangible assets			$	5,545,299

The Company incurred acquisitions costs of $476,454 during the year ended June 30, 2020 that have been recorded in selling, general and administrative expenses on the consolidated statement of operations. The results of the Pasture Genetics acquisition are included in our consolidated financial statements from the date of acquisition through June 30, 2020.

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Years Ended June 30,
	2020			2019
Revenue	$	88,664,131		$	133,007,762
Net loss	$	(20,299,845	)	$	(9,623,060	)

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2020 include the elimination of acquisition charges of $476,454 and amortization of acquired intangibles of $327,707.

For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 include the amortization of acquired intangibles of $327,707.

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Goodwill and Intangible Assets

12 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2020 on its one reporting unit and determined that goodwill was not impaired.

During the fourth quarter of the year ended June 30, 2019, the Company terminated its production and distribution agreements with Pioneer, thereby triggering a potential indicator of goodwill impairment. As a result, the Company initiated a goodwill impairment test for the year ended June 30, 2019.

The Company compared the carrying value of its invested capital to its estimated fair values at June 30, 2019. The Company estimated the fair value based on the income approach. The discounted cash flows served as the primary basis for the income approach and were based on discrete financial forecasts developed by management. Cash flows beyond the discrete forecast period of ten years were estimated using the perpetuity growth method calculation. The income approach valuation included estimated weighted average cost of capital, which was 10.6%.

Upon completing the impairment test, the Company determined that the fair value of invested capital was less than the carrying value by approximately 10%, thus indicating an impairment. The Company recognized a goodwill impairment charge of $11.9 million for the year ended June 30, 2019, which represented the entire goodwill balance prior to the impairment charge.

The following table summarizes the activity of goodwill for the years ended June 30, 2020 and 2019, respectively.

	Balance at July 1, 2019		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2020
Goodwill	$	—	$	1,452,436	$	—	$	56,239	$	1,508,675

	Balance at July 1, 2018		Additions		Impairment			Currency Translation Adjustment		Balance at June 30, 2019
Goodwill	$	10,292,265	$	1,573,546	$	(11,865,811	)	$	—	$	—

For the year ended June 30, 2020, the Company determined there was no impairment on its intangible assets. For the year ended June 30, 2019, the Company recorded an impairment charge on its intangible assets of $6.0 million.  Refer to Note 4 for further information.

Intangible assets consist of the following:

	Balance at July 1, 2019		Additions		Impairment		Amortization			Currency Translation Adjustment		Balance at June 30, 2020
Trade name	$	1,205,346	$	402,215	$	—	$	(139,999	)	$	11,716	$	1,479,278
Customer relationships		1,055,747		5,143,084		—		(202,197	)		190,452		6,187,086
Non-compete		30,267		—		—		(8,955	)		—		21,312
GI customer list		64,475		—		—		(7,165	)		—		57,310
Supply agreement		1,002,154		—		—		(75,647	)		—		926,507
Grower relationships		1,647,800		—		—		(105,407	)		—		1,542,393
Intellectual property		26,786,468		—		—		(1,370,803	)		—		25,415,665
In process research and development		380,000		—		—		—			—		380,000
License agreement		—		2,400,863		—		(135,295	)		34,491		2,300,059
Internal use software		542,227		—		—		(67,779	)		—		474,448
	$	32,714,484	$	7,946,162	$	—	$	(2,113,247	)	$	236,659	$	38,784,058

	Balance at July 1, 2018		Additions		Impairment			Amortization			Currency Translation Adjustment		Balance at June 30, 2019
Trade name	$	1,159,826	$	150,000	$	—		$	(104,480	)	$	—	$	1,205,346
Customer relationships		1,156,955		—		—			(101,208	)		—		1,055,747
Non-compete		62,720		—		—			(32,453	)		—		30,267
GI customer list		71,639		—		—			(7,164	)		—		64,475
Supply agreement		1,077,783		—		—			(75,629	)		—		1,002,154
Distribution agreement		6,344,253		—		(5,991,792	)		(352,461	)		—		—
Grower relationships		1,753,208		—		—			(105,408	)		—		1,647,800
Intellectual property		20,873,393		7,200,000		—			(1,286,925	)		—		26,786,468
In process research and development		—		380,000		—			—			—		380,000
Internal use software		610,003		43,000		(43,000	)		(67,776	)		—		542,227
	$	33,109,780	$	7,773,000	$	(6,034,792	)	$	(2,133,504	)	$	—	$	32,714,484

Amortization expense totaled $2,113,247 and $2,133,504 for the years ended June 30, 2020 and 2019, respectively. Estimated aggregate remaining amortization is as follows:

	2021		2022		2023		2024		2025		Thereafter
Amortization expense	$	2,281,149	$	2,228,367	$	2,149,189	$	2,128,729	$	2,083,188	$	27,712,247

Acquisition of Wheat Assets

On August 15, 2019, the Company entered into several agreements to effectuate the purchase of a wheat breeding program in Australia, or the Wheat Acquisition from Dow AgroScience, or Dow.  In the transaction, the Company acquired:

• A 15-year prepaid license of germplasm.  The license includes commercial, pre-commercial and experimental proprietary wheat populations.

• The right, during the term of the license, to develop future varieties.  The license does not transfer ownership of the existing varieties licensed, but the Company will own any future varieties developed.

• An option to renew the license for five additional years.

• Tangible fixed assets used in the wheat breeding program.

• A contract with a service provider to promote existing commercialized wheat varieties covered by the license.

The wheat market in Australia operates under an End Point Royalty, or EPR, System in which the wheat variety owner earns a fixed royalty on every metric ton of grain produced.  With the Wheat Acquisition, the Company has the right to collect EPR on commercialized wheat varieties included in its license.

The purchase price was approximately $2.6 million, which was paid in cash.  The purchase price was allocated to the assets acquired based on the relative fair value of the license and fixed assets.  $2.4 million was allocated to the license, which will be amortized over 15 years in accordance with the term of the agreement.  The fair value of the license was determined using a discounted cash flow analysis.  $0.2 million was allocated to the fixed assets, which have useful lives of 3-5 years.

The acquired assets did not meet the definition of a business in the Accounting Standards Codification.

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Property, Plant and Equipment

12 Months Ended

Jun. 30, 2020

Property Plant And Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	June 30, 2020			June 30, 2019
Land and improvements	$	2,157,663		$	2,150,085
Buildings and improvements		10,014,879			10,018,108
Machinery and equipment		13,550,413			12,579,698
Vehicles		2,087,634			2,099,814
Leasehold Improvements		552,810			—
Construction in progress		71,316			66,921
Total property, plant and equipment		28,434,715			26,914,626
Less: accumulated depreciation		(7,940,403	)		(6,279,677	)
Property, plant and equipment, net	$	20,494,312		$	20,634,949

Depreciation expense totaled $2,580,234 and $1,995,042 for the years ended June 30, 2020 and 2019, respectively.

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Debt

12 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

DEBT

NOTE 9 - DEBT

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2020			June 30, 2019
Working capital lines of credit
KeyBank	$	—		$	2,350,000
CIBC		11,205,664			—
National Australia Bank Limited		16,437,600			8,426,400
National Australia Bank Limited Overdraft Facility		—			351,544
Debt issuance costs		(660,000	)		(372,396	)
Total working capital lines of credit, net	$	26,983,264		$	10,755,548
Current portion of long-term debt
Finance leases	$	809,632		$	563,087
Debt issuance costs		(8,154	)	$	(11,070	)
Term Loan - National Australia    Bank Limited		342,450			73,731
Machinery & equipment loans -    National Australia Bank Limited		272,997			215,519
Vehicle loans - Toyota Finance		200,779			—
Unsecured subordinate promissory note		—			100,000
Secured real estate note - Conterra		202,374			247,942
Debt issuance costs		(39,556	)		(75,707	)
Total current portion, net		1,780,522			1,113,502
Long-term debt, less current portion
Finance leases		1,642,975			1,709,481
Debt issuance costs		(6,923	)		(15,078	)
Term loan - National Australia    Bank Limited		3,082,050			256,303
Machinery & equipment loans -    National Australia Bank Limited		396,404			309,988
Vehicle loans - Toyota Finance		313,470			—
Secured real estate note - Conterra		8,956,885			9,922,269
Debt issuance costs		(56,038	)		(24,869	)
Total long-term portion, net		14,328,823			12,158,095
Total debt, net	$	16,109,345		$	13,271,596

In September 2015, the Company entered into a credit and security agreement, or the KeyBank Credit Facility, with KeyBank. Key provisions of the KeyBank Credit Facility, as amended, included:

• An aggregate principal amount that the Company was able to borrow, repay and reborrow, of up to $45.0 million in the aggregate.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest, were payable in full on December 31, 2020.

A borrowing base of up to the total of the following: (a) 85% of eligible domestic accounts receivable, plus (b) and 90% of eligible foreign accounts receivable, plus (c) the lesser of (i) 75% of the cost eligible inventory or (ii) 90% of the net orderly liquidation value of the inventory, plus (d) the amount of any unencumbered cash the Company holds at KeyBank, minus (e) $16.0 million subject to lender reserves.

• Loans were based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.9% per annum for Eurodollar Loans and 1.0% for Base Rate Loans) (both as defined in the KeyBank Credit Facility), generally at the Company’s option. In the event of a default, at the option of KeyBank, the interest rate on all obligations would have increased by 3% per annum over the rate otherwise applicable.

• Subject to certain exceptions, the KeyBank Credit Facility was secured by a first priority perfected security interest in all of the Company’s assets and its domestic subsidiaries, which guaranteed the Company’s obligations under the KeyBank Credit Facility. The KeyBank Credit Facility was further secured by a lien on, and a pledge of, 65% of the stock of its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd.

In connection with the consummation of the Loan Agreement with CIBC described below, the Company terminated the KeyBank Credit Facility on December 26, 2019.  In connection with such termination, the Company paid KeyBank approximately $5.9 million in aggregate principal, interest and fees that were outstanding and payable under the KeyBank Credit Facility at the time of its termination, and all liens on the assets of the Company and its subsidiaries guaranteeing such facility, together with such subsidiary guarantees, were released and terminated.

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with CIBC, which originally provided for a $35.0 million credit facility, or the CIBC Credit Facility.  The Loan Agreement was subsequently amended on September 22, 2020.  As amended, the Loan Agreement provides for a $25.0 million credit facility. The following is a summary of certain terms of the CIBC Credit Facility:

• Advances under the CIBC Credit Facility are to be used: (i) to refinance indebtedness to KeyBank; (ii) to finance the Company’s ongoing working capital requirements; and (iii) for general corporate purposes.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans may be based on (i) a Base Rate plus 0.5% per annum or (ii) LIBOR Rate plus 2.5% per annum (both as defined in the Loan Agreement), generally at the Company’s option. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of the Borrowers’ assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate the Company’s outstanding obligations under the Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

At June 30, 2020, the Company was not in compliance with all CIBC debt covenants. On September 22, 2020, the Company amended the Loan Agreement. Among other things, the amendment provided for a waiver of the Company’s non-compliance with a certain financial covenant. See Note 19 for further discussion on this amendment.

In November 2017, the Company entered into a secured note financing transaction, or the Loan Transaction, with Conterra Agricultural Capital, LLC, or Conterra, for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes, or the Notes, to Conterra as follows:

• Secured Real Estate Note. The Company issued one Note in the principal amount of $10.4 million, or the Secured Real Estate Note, that is secured by a first priority security interest in the property, plant and fixtures, or the Real Estate Collateral, located at the Company's Five Points, California and Nampa, Idaho production facilities and its Nampa, Idaho research facilities, or the Facilities. On December 24, 2019, the Company entered into an amendment to extend the maturity date to November 30, 2022, as well as revised the Note’s payments starting July 1, 2020. The Secured Real Estate Note bears interest of 7.75% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. In November 2019, the Company paid down $753,120 of principal. Pursuant to the December 2019 amendment, the Company agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time.

Secured Equipment Note. The Company issued a second Note in the principal amount of $2.1 million, or the Secured Equipment Note, that was secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note was also secured by the Real Estate Collateral. The Secured Equipment Note was scheduled to mature on November 30, 2019. The Secured Equipment Note bore an interest at a rate of 9.5% per annum. The Company agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Secured Equipment Note was repaid in full in August 2018.

On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to its terms, the sale and leaseback transaction was required to be accounted for as a financing arrangement. Accordingly, the proceeds received from American AgCredit were accounted for as proceeds from a debt financing. Under the terms of the transaction:

• The Company sold the equipment to American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a note (in the principal amount of $2,081,527, plus accrued interest of $24,868) held by Conterra, which had an interest rate of 9.5% per annum and was secured by, among other things, the equipment.

• The Company entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an annual interest rate of 5.6%). At the end of the lease term, the Company will repurchase the equipment for $1.

Australian Facilities

S&W Australia and Pasture Genetics both have debt facilities with NAB, all of which are guaranteed by us up to a maximum of AUD $15,000,000 (USD $10,273,500 at June 30, 2020) and cross-guaranteed by S&W Australia and Pasture Genetics.      

S&W Australia.  S&W Australia has a series of debt facilities with NAB providing for up to AUD $25,337,000 (USD $17,353,000) of credit, the key terms of which were amended in February 2020 (in connection with the Pasture Genetics acquisition) and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an Overdraft Facility having a credit limit of AUD $2,000,000 (USD $1,369,800 at June 30, 2020) and (ii) a Borrowing Base Line having a credit limit of AUD $16,000,000 (USD $10,958,400 at June 30, 2020). The seasonal credit facility expires on March 31, 2022. As of June 30, 2020, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.7% per annum calculated daily. The Overdraft Facility permits S&W Australia to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of June 30, 2020, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of June 30, 2020, AUD $14,000,000 (USD $9,588,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of S&W Australia. 

• S&W Australia has a flexible rate loan, or the Term Loan, in the amount of AUD $5.0 million (USD $3,424,500 at June 30, 2020). Required annual principal payments of AUD $500,000 on the Term Loan will commence on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.  The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2023 and have interest rates ranging from 3.47% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,369,800) at June 30, 2020.  As of June 30, 2020, AUD $839,869 (USD $575,226) was outstanding under S&W Australia’s master asset finance facility.

• S&W Australia has a Keith Machinery and Equipment Facility for the machinery and equipment used in the operations of the Keith building. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. As of June 30, 2020, AUD $137,503 (USD $94,176) was outstanding under the Keith Machinery and Equipment Facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2020.

Pasture Genetics.  Pasture Genetics has a working capital facility with NAB and a facility with TOYOTA Finance to finance purchase of vehicles.

• Pasture Genetics has a working capital facility with NAB with a credit limit of AUD $10.0 million (USD $6,849,000 at June 30, 2020) and a borrowing base determined from qualified inventory and accounts receivable. The facility will expire on March 31, 2022. Interest will be payable on amounts outstanding under the facility at a floating trade refinance rate quoted by NAB plus 1.5% at the time of each drawdown.  The facility is secured by a fixed and floating lien over all the present and future rights, property and undertakings of Pasture Genetics.  As of June 30, 2020, AUD $10.0 million (USD $6,849,000) was outstanding under Pasture Genetics’ working capital facility with NAB.

• Pasture Genetics finances certain vehicle purchases with TOYOTA Finance.  This facility has various maturity dates through 2023 and have interest rates ranging from 4.04% to 5.83%.  As of June 30, 2020, AUD $750,839 (USD $514,249) was outstanding under TOYOTA Finance facility.

Pasture Genetics was in compliance with all debt covenants at June 30, 2020.

The annual maturities of short-term and long-term debt are as follows:

Fiscal Year	Amount
2021	$	1,828,232
2022		1,768,958
2023		9,985,645
2024		555,441
2025		369,491
Thereafter		1,712,250
Total	$	16,220,017

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Income Taxes

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 10 - INCOME TAXES

Loss before income taxes consists of the following:

	Years Ended June 30,
	2020			2019
United States	$	(18,778,030	)	$	(9,336,700	)
Foreign		(583,100	)		(164,974	)
Loss before income taxes	$	(19,361,130	)	$	(9,501,674	)

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2020		2019
Current:
Federal	$	—	$	—
State		15,972		28,591
Foreign		369,996		92,744
Total current provision		385,968		121,335
Deferred:
Federal		—		(227,142	)
State		—		(42,940	)
Foreign		—		—
Total deferred provision (benefit)		—		(270,082	)
Provision (Benefit) for income taxes	$	385,968	$	(148,747	)

The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2020			2019
Tax benefit at statutory tax rate	$	(4,065,839	)	$	(1,995,352	)
State benefit, net of federal benefit		(387,398	)		(304,015	)
Other permanent differences		134,141			23,786
Federal and state research credits - current year		(239,373	)		(228,039	)
Foreign rate differential		170,693			10,819
Shortfall on restricted stock vest		10,526			49,118
Change in unrecognized tax benefit		11,778			49,939
Valuation allowance		4,540,563			2,265,361
Other		210,877			(20,364	)
	$	385,968		$	(148,747	)

Significant components of the Company's deferred tax assets are shown below.

	June 30,
	2020			2019
Deferred tax assets:
Net operating loss carry forwards	$	10,681,884		$	5,817,688
Compensation accruals		478,696			261,365
Allowance for bad debts		1,338,083			1,376,388
Stock compensation		444,725			288,648
Tax credit carry forwards		901,656			662,283
Intangible assets		1,628,858			2,226,539
Lease liability		1,126,905			—
Deferred rent		—			47,226
Assets held for sale		—			367,387
163(j) limitation interest		349,003			—
Other, net		693,637			476,411
Total deferred tax assets		17,643,447			11,523,935
Valuation allowance for deferred tax assets		(14,656,843	)		(9,774,130	)
Deferred tax assets, net of valuation allowance		2,986,604			1,749,805
Deferred tax liabilities
ROU lease asset		(1,253,577	)		—
Fixed assets		(1,733,027	)		(1,749,805	)
Total deferred tax liabilities		(2,986,604	)		(1,749,805	)
Net deferred tax asset / (liability)	$	—		$	—

The Company recognizes federal and state current tax liabilities or assets based on its estimate of taxes payable to or refundable from tax authorities in the current fiscal year.  The Company also recognizes federal and state deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards.  The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

The Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on projections of taxable income, the Company had previously determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a full valuation allowance was recorded as of June 30, 2017.  The Company’s valuation allowance position has not changed for the years ended June 30, 2020 and June 30, 2019, respectively, as the Company does not believe that it is more likely than not that it will realize its deferred tax assets.  The valuation allowance increased by approximately $4.9 million for the year ended June 30, 2020, related primarily to net operating losses generated in the current year.

The U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on a corporation's ability to utilize net operating loss carryovers ("NOLs") if it experiences an ownership change as defined in Section 382.  In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three-year period.  In the event that an ownership change has occurred, or were to occur, utilization of the Company’s NOLs would be subject to an annual limitation under Section 382 as determined by multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate as defined in the Internal Revenue Code.  Any unused annual limitation may be carried over to later years.  The Company could experience an ownership change under Section 382 as a result of events in the past in combination with events in the future.  If so, the use of the Company’s NOLs, or a portion thereof, against future taxable income may be subject to an annual limitation under Section 382, which may result in expiration of a portion of the NOLs before utilization.  To the extent our use of net operating loss carryforwards is significantly limited under the rules of Section 382, our income could be subject to U.S. corporate income tax earlier than it would if we were able to use net operating loss carryforwards, which could result in lower profits.  Any carryforwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance.  As of June 30, 2020, the Company is not aware of any applicable Section 382 limitations that may exist on its net operating losses.

As of June 30, 2020, the Company had federal and state net operating loss carryovers of approximately $44.1 million and $15.7 million, respectively, which will begin to expire June 30, 2030, unless previously utilized. A portion of the federal net operating losses generated after June 30, 2018 can be carried forward indefinitely as a result of the Tax Cuts and Jobs Act. Therefore, approximately $24.5 million of net operating loss carryovers are not subject to expiration. The Company has federal research credits of $881,836 which will expire June 30, 2031, unless previously utilized. The Company also has foreign tax credits of $157,859 which will begin to expire June 30, 2023, unless previously utilized. The Company has state research credits of $25,089 that do not expire. The Company also has Australian net operating loss carryover of approximately $0.9 million as of the year ended June 30, 2020 that do not expire. In addition, the Company has $1.6 million of Section 163(j) interest limitation carryovers as of June 30, 2020 which do not expire.

As of June 30, 2020, the Company has not provided for foreign withholding taxes on approximately $2.9 million of undistributed earnings of its foreign subsidiaries, as these earnings are considered indefinitely reinvested outside of the United States. The Company does not plan to repatriate any earnings that are currently located in its foreign subsidiaries as of June 30, 2020.  However, to the extent that the foreign subsidiaries accrue earnings and profits in the future years, the Company does plan to repatriate a portion of those funds to the U. S. and will record withholding taxes as those earnings and profits are incurred.

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.  

The Company has approximately $79,341 of unrecognized tax benefits related to current year tax positions as of June 30, 2020. Included in the unrecognized tax benefits was approximately $62,679 of tax benefits that, if recognized, would reduce our annual effective tax rate, if the Company were not in a valuation allowance position. However, as the Company is in a full valuation allowance position, there would be no impact to the annual effective tax rate if the tax benefits were recognized.

The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued interest and penalties associated with uncertain tax positions as of June 30, 2020 and 2019. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

CARES Act

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act.  The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. Some of the more significant changes include the ability to carryback net operating losses, the acceleration of AMT credit receivables, and the ability to take 100% bonus on qualified improvement property ("QIP"). Of these highlighted provisions, the Company has only recognized the provisional impact of the 100% bonus on QIP. With respect to the 163(j) limitation implemented as part of the Tax Cuts and Jobs Act, companies were previously limited to deducting interest to thirty percent of adjusted taxable income per year.  However, with the passage of the CARES Act, companies may elect to use fifty percent of adjusted taxable income in order to calculate the allowable interest deduction for years 2019 and 2020.  These CARES Act provisions did not impact the Company’s tax expense calculations or related income tax account balances.  

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Warrants

12 Months Ended

Jun. 30, 2020

Warrants And Rights Note Disclosure [Abstract]

WARRANTS

NOTE 11 - WARRANTS

The following table summarizes the total warrants outstanding at June 30, 2020:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2019		New Issuances		Expired			Outstanding as of June 30, 2020
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		(2,699,999	)		—
						2,699,999		—		(2,699,999	)		—

The following table summarizes the total warrants outstanding at June 30, 2019:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2018		New Issuances		Expired		Outstanding as of June 30, 2019
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		—		2,699,999
						2,699,999		—		—		2,699,999

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Equity

12 Months Ended

Jun. 30, 2020

Equity [Abstract]

EQUITY

NOTE 12 - EQUITY

On September 5, 2018, the Company entered into a Securities Purchase Agreement, or the Securities Purchase Agreement, with MFP Partners, L.P., or MFP, pursuant to which the Company sold to MFP 1,607,717 shares of common stock of the Company, or the Common Shares, at a purchase price of $3.11 per share at an initial closing, and agreed to sell, subject to the satisfaction of certain conditions, 7,235 shares of newly designated Series A Convertible Preferred Stock of the Company, or the Preferred Shares, to MFP at a purchase price of $3,110 per share at a second closing, or the Second Closing.

The Second Closing was completed on October 23, 2018, for aggregate gross proceeds of approximately $22.5 million, which was used primarily to fund the Chromatin Acquisition. The Preferred Shares carried no voting rights and were automatically convertible into shares of common stock at the rate of 1,000 shares of common stock per Preferred Share upon the approval of the Company's stockholders for the issuance of the requisite shares of common stock. Pursuant to the Securities Purchase Agreement, the Company agreed to use its reasonable best efforts to solicit the approval of its shareholders for the issuance of stock upon the conversion of the Preferred Shares at a special meeting of shareholders, and at each annual meeting of shareholders thereafter, if necessary.  Approval was obtained at a Special Meeting of Stockholders held on November 20, 2018, and the Preferred Shares automatically converted into 7,235,000 shares of common stock on that same day.

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Document and Entity Information - USD ($)

12 Months Ended

Jun. 30, 2020

Sep. 23, 2020

Dec. 31, 2019

Cover [Abstract]

Entity Registrant Name

S&W Seed Co

Entity Central Index Key

0001477246

Document Type

10-K

Document Period End Date

Jun. 30, 2020

Amendment Flag

false

Current Fiscal Year End Date

--06-30

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filers

No

Entity Small Business

true

Entity Emerging Growth Company

false

Entity Shell Company

false

Entity Current Reporting Status

Yes

Entity Filer Category

Non-accelerated Filer

Entity File Number

001-34719

Entity Tax Identification Number

27-1275784

Entity Address, Address Line One

2101 Ken Pratt Blvd

Entity Address, Address Line Two

Suite 201

Entity Address, City or Town

Longmont

Entity Address, State or Province

CO

Entity Address, Postal Zip Code

80501

City Area Code

720

Local Phone Number

506-9191

Entity Public Float

$ 26,541,012

Entity Common Stock, Shares Outstanding

33,450,569

Document Fiscal Period Focus

FY

Document Fiscal Year Focus

2020

Trading Symbol

SANW

Title of 12(b) Security

Common Stock, par value $0.001 per share

Security Exchange Name

NASDAQ

Entity Interactive Data Current

Yes

Entity Incorporation, State or Country Code

NV

Document Annual Report

true

Document Transition Report

false

Documents Incorporated by Reference

Portions of the registrant's Proxy Statement for its next Annual Meeting of Stockholders are incorporated herein by reference inPart III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement is to be filed with the Securitiesand Exchange Commission within 120 days of the registrant's fiscal year ended June 30, 2020.

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Foreign Currency Contracts

12 Months Ended

Jun. 30, 2020

Foreign Currency [Abstract]

FOREIGN CURRENCY CONTRACTS

NOTE 13 - FOREIGN CURRENCY CONTRACTS

The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $7,047,514 at June 30, 2020 and their maturities range from July to November 2020.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract liabilities totaled $35,218 at June 30, 2020 and foreign currency contract liabilities totaled $42,255 at June 30, 2019. The Company recorded a gain on foreign exchange contracts of $7,615 and $52,788, which is reflected in cost of revenue for the years ended June 30, 2020 and 2019, respectively.

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Commitments and Contingencies

12 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 14 - COMMITMENTS AND CONTINGENCIES

Contingencies

Based on information currently available, management is not aware of any other matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

Legal Matters

The Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote.

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Related Party Transactions

12 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 15 - RELATED PARTY TRANSACTIONS

On September 5, 2018, the Company entered into the Securities Purchase Agreement with MFP, pursuant to which the Company sold the Common Shares at the Initial Closing and the Preferred Shares at the Second Closing. The Initial Closing was completed on September 5, 2018 and the Second Closing was completed on October 23, 2018. See Note 12 for further discussion on the Second Closing.

On December 18, 2018, the Company entered into a Loan and Security Agreement, or the MFP Loan Agreement, with MFP, pursuant to which the Company was able to borrow up to $5,000,000, in minimum increments of $1,000,000, from MFP during the period beginning on December 18, 2018 and ending on the earlier to occur of (i) March 18, 2019 and (ii) certain specified events of default. Pursuant to the MFP Loan Agreement, interest accrued on outstanding principal at a fixed per annum rate of 6.0%. In addition, the Company was obligated to pay to MFP a fee equal to 2.0% of each advance under the MFP Loan Agreement. Concurrently with the execution of the MFP Loan Agreement, the Company drew down $1,000,000 under the MFP Loan Agreement, which was disbursed to the Company on December 21, 2018. On December 31, 2018, the Company repaid in full the $1,000,000 disbursed to the Company. As of June 30, 2019, no amounts remained outstanding under the MFP Loan Agreement.

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Equity-Based Compensation

12 Months Ended

Jun. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

EQUITY-BASED COMPENSATION

NOTE 16 - EQUITY-BASED COMPENSATION

Equity Incentive Plans

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan, or as amended and/or restated from time to time, the 2009 Plan. The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares.

In January 2019, the Company's Board of Directors and stockholders approved the 2019 Equity Incentive Plan, or 2019 Plan, as a successor to and continuation of the 2009 Plan. Subject to adjustment for certain changes in the Company's capitalization, the aggregate number of shares of the Company's common stock that may be issued under the 2019 Plan will not exceed 4,243,790 shares, which is the sum of (i) 2,750,000 new shares, plus (ii) 350,343 shares that remained available for grant under the 2009 Plan as of January 16, 2019, plus (iii) 1,143,447 shares subject to outstanding stock awards granted under the 2009 Plan.

The term of incentive stock options granted under the Company’s equity incentive plans may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the Company’s equity incentive plans must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period.

The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants.

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	June 30,
	2020			2019
Risk free rate	0.3%-1.66%			1.9% - 3.0%
Dividend yield		0	%		0	%
Volatility	39.4%-48.9%			34.5% - 41.5%
Average forfeiture assumptions		1.1	%		1.1	%

During the year ended June 30, 2020, the Company granted 1,899,934 options to its directors, certain members of the executive management team and other employees at exercise prices ranging from $2.26 - $2.37. These options vest in either quarterly or annual periods over one to three years, and expire ten years from the date of grant.

A summary of stock option activity for the years ended June 30, 2020 and 2019 is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2018		792,074		$	4.55		6.3	$	10,413
Granted		497,178			2.85		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(166,500	)		6.17		—		—
Outstanding at June 30, 2019		1,122,752			3.55		8.0		34,135
Granted		1,899,934			2.36		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(146,792	)		4.12		—		—
Outstanding at June 30, 2020		2,875,894			2.74		8.6		22,409
Options vested and exercisable at June 30, 2020		1,079,783			3.21		7.6		—
Options vested and expected to vest as of    June 30, 2020		2,866,236		$	2.72		8.6	$	22,311

The weighted average grant date fair value of options granted and outstanding at June 30, 2020 was $0.78. At June 30, 2020, the Company had $1,291,135 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 2.13 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the years ended June 30, 2020 and 2019, the Company issued 417,933 and 175,758 restricted stock units to its directors, certain members of the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to quarterly or annual installments over one to three-years. The fair value of the awards during the years ended June 30, 2020 and 2019 totaled $940,700 and $472,171, respectively, and was based on the closing stock price on the date of grants.

The Company recorded $700,724 and $379,212 of stock-based compensation expense associated with grants of restricted stock units during the years ended June 30, 2020 and 2019, respectively. A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2018		89,193		$	3.98		1.1
Granted		175,758			2.69		2.8
Vested		(107,747	)		3.75		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2019		157,204			2.69		1.4
Granted		417,933			2.25		2.8
Vested		(177,010	)		2.45		—
Forfeited		(1,324	)		2.83		—
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6

At June 30, 2020, the Company had $705,197 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.55 years.

At June 30, 2020, there were 824,840 shares available under the 2019 Plan for future grants and awards.

Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the years ended June 30, 2020 and 2019, totaled $1,167,951 and $694,610, respectively.

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Non-Cash Activities for Statements of Cash Flows

12 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

NOTE 17 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the years ended June 30, 2020 and 2019, respectively.

	Years Ended June 30,
	2020			2019
Purchases of equipment classified as finance lease		(468,390	)		(574,018	)
Contingent consideration issued		(4,407,887	)		—

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Paycheck Protection Program

12 Months Ended

Jun. 30, 2020

Extraordinary And Unusual Items [Abstract]

PAYCHECK PROTECTION PROGRAM

NOTE 18 – PAYCHECK PROTECTION PROGRAM

In response to the COVID-19 pandemic, the PPP was established under the CARES Act and administered by the SBA. Companies who met the eligibility requirements set forth by the PPP could qualify for PPP loans. If the loan proceeds are fully utilized to pay qualified expenses, the full principal amount of the PPP loan, along with any accrued interest, may qualify for loan forgiveness, subject to potential reduction based on the level of full-time employees maintained by the organization.

In April 2020, the Company received a loan of $1,958,600 under the PPP provided by CIBC. The loan bears interest at 1.0%, with principal and interest payments deferred for the first six months of the loan.  After that, the loan and interest would be paid back over a period of 18 months, if the loan is not forgiven under the terms of the PPP.  

When it applied for the loan, the Company believed it would qualify to have the loan forgiven under the terms of PPP, and therefore considered the loan to be substantively a conditional government grant.  The Company has performed initial calculations for PPP loan forgiveness, and expects that the PPP loan will be forgiven in full because 1) the Company has, prior to June 30, 2020, utilized all of the proceeds for payroll and other qualified expenses and 2) the Company believes it will continue to comply with other terms and conditions necessary for forgiveness.

As such, the Company has decided that the PPP loan should be accounted for as a government grant.  As US GAAP does not contain guidance on the accounting for government grants, the Company is following the guidance in International Accounting Standards, or IAS, 20, Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS 20, “a forgivable loan from government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.” As discussed above, the Company believes there is reasonable assurance it will meet the terms of forgiveness.  Under IAS 20, government grants are recognized in income as required activities are undertaken.  As the Company believes that it completed the required activities by utilizing PPP proceeds for payroll and other qualified expenditures prior to June 30, 2020, it has recognized PPP grant income for the full amount of the PPP loan, $1,958,600, and no liability for the PPP loan is reflected in the consolidated balance sheet as of June 30, 2020.  

The Company plans to submit the PPP loan forgiveness application in the near term.  Although the Company believes it is probable that the PPP loan will be forgiven, the Company’s actions and information must be evaluated by the lender and SBA before forgiveness is formally granted.  

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Subsequent Events

12 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 19 - SUBSEQUENT EVENTS

On September 22, 2020, the Company entered into a First Amendment to Loan and Security Agreement with CIBC, which amended the Loan Agreement. Pursuant to this amendment, the Company and CIBC agreed to:

• decrease the amount of the revolving credit facility from $35.0 million to $25.0 million;

• decrease the amount of the inventory sublimit under the revolving credit facility from $25.0 million to $12.5 million;

• increase the interest rate by 0.5% (from prime plus .50% to prime plus 1.00% and from LIBOR plus 2.50% to LIBOR plus 3.00%), and introduce a 1.0% LIBOR floor;

• suspend the Company’s financial covenant to maintain a fixed charge coverage ratio equal to or greater than 1.10 to 1.00 until the quarter ending March 31, 2021, and waive the Company’s noncompliance with this covenant for the quarter ending June 30, 2020;

• provide that, following the fiscal quarter ending March 31, 2021, the Company must maintain a fixed charge coverage equal to or greater than 1.15 to 1.00;

• include a financial covenant requiring the Company to maintain year-to-date EBITDA of no less than negative $6,000,000, tested quarterly, commencing with the quarter ending September 30, 2020 through and including December 31, 2020 (this covenant will not apply for periods after December 31, 2020); and

• increase the availability reserve from $5.0 million to $7.5 million upon closing, which will further increase by $500 thousand on the last day of each month commencing November 1, 2020 until the total availability reserve reaches $10 million.

Except as modified by the foregoing amendment, all terms and conditions of the Loan Agreement remain in full force and effect.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. We have recorded a combined $1.3 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2020. We have recorded a combined $0.6 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2019.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows. The new strain of coronavirus (“COVID-19”) in FY2020 and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared. However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 26% of its revenue for the year ended June 30, 2020. One customer accounted for 65% of its revenue for the year ended June 30, 2019.

One customer accounted for 21% of the Company’s accounts receivable at June 30, 2020. One customer accounted for 19% of the Company’s accounts receivable at June 30, 2019.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 54% and 20% of revenue during the years ended June 30, 2020 and 2019, respectively. The net book value of fixed assets located outside the United States was 17% and 11% of total fixed assets at June 30, 2020 and June 30, 2019, respectively. Cash balances located outside of the United States may not be insured and totaled $1,690,748 and $236,822 at June 30, 2020 and June 30, 2019, respectively.

The following table shows revenue from external sources by destination country:

	Years Ended June 30,
	2020				2019
United States	$	36,724,591	46	%	$	88,176,809	80	%
Australia		15,079,996	19	%		2,787,128	3	%
Saudi Arabia		9,189,291	12	%		4,745,993	4	%
Mexico		2,454,504	3	%		2,264,827	2	%
South Africa		2,182,553	3	%		797,722	1	%
Pakistan		2,124,038	3	%		1,009,120	1	%
Italy		1,400,641	2	%		326,364	0	%
Sudan		1,308,874	2	%		717,317	1	%
Libya		1,142,920	1	%		2,629,750	2	%
France		1,040,744	1	%		845,172	1	%
Other		6,934,046	8	%		5,422,309	5	%
Total	$	79,582,198	100	%	$	109,722,511	100	%

Covid-19 Pandemic

Covid-19 Pandemic

In addition to the foregoing, the Company is monitoring closely the impact of the COVID-19 pandemic on its business, including its results of operations and financial condition, and has implement measures designed to protect the health and safety of its employees while continuing its operations.  

In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. The Company’s sales efforts also have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically the Company’s most active selling period, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, the Company immediately attempted to shift its sales activities to video conferencing and similar customer interaction models, but the Company has found these alternative approaches to generally be less effective than in-person sales efforts.

In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, this would adversely affect the Company’s product revenue.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

The terms of the Company’s loan and security agreement with CIBC place restrictions on its operating and financial flexibility (See Notes 9 and 19). The COVID-19 pandemic creates risk in the Company’s ability to comply with its CIBC covenants which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. In order for the Company to maintain compliance with its CIBC covenants, the Company may need to obtain additional capital or alternative financing. There can be no assurance that the Company will be successful in raising additional capital or obtaining alternative financing. If the Company is unable to raise sufficient additional capital or obtain alternative financing, it may need to reduce the scope of its operations or sell certain assets.

International Operations

International Operations

The Company translates its foreign operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Cost of Revenue

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Cash Equivalents

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $1,366,220 and $1,576,900 at June 30, 2020 and June 30, 2019, respectively.

Inventories

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

The Company’s subsidiary, S&W Australia, does not fix the final price for seed payable to its growers until the completion of a given year’s sales cycle pursuant to its standard contract production agreement. S&W Australia records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management’s best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

During the fourth quarter of the year ended June 30, 2019, the Company recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations.  $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered the Company’s planned consumption of these varieties and as a result the Company determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices.  The remaining inventory write-down primarily relates to changes in the Company’s assessment of the future market prices for non-dormant alfalfa seed varieties.  The changes in the Company’s assessment occurred as it updated its business plans taking into account activity during the fourth quarter of fiscal year 2019, which is the height of the sales season for non-dormant varieties.

Components of inventory are:

	June 30, 2020		June 30, 2019
Raw materials and supplies	$	1,227,185	$	664,541
Work in progress		4,395,503		5,664,934
Finished goods		58,260,250		64,966,045
	$	63,882,938	$	71,295,520

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 years for vehicles. 

Intangible Assets

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 20 years for customer relationships, 15 years for trade names and 16 years for other intangible assets.

Goodwill

Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2020 on its one reporting unit and determined that goodwill was not impaired. See Note 7 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2019 and recorded an impairment charge of $11.9 million.  During the year ended June 30, 2020, the Company did not record an impairment charge.  The impairment charge in fiscal year 2019 related to the full impairment of the Company’s goodwill and was a result of the termination of the distribution agreement with Pioneer/Corteva.

Investment in Bioceres S.A.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $1.3 million at June 30, 2020 and 2019, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted ASU 2016-01,Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.  

Prior to July 1, 2018, the investment was accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges would have been recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

No adjustments for impairment or observable transactions were made in fiscal years 2020 or 2019.  

Research and Development Costs

Research and Development Costs

The Company is engaged in ongoing research and development, or R&D, of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s effective tax rate for the years ended June 30, 2020 and 2019 has been affected by the valuation allowance on the Company’s deferred tax assets.

Net Income (Loss) Per Common Share Data

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, or EPS, is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

The treasury stock method is used for common stock warrants, stock options, and restricted stock awards. Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with net number of shares assumed to be issued added to the denominator.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2020			2019
Numerator:
Net loss attributable to S&W Seed Company	$	(19,674,324	)	$	(9,305,242	)
Numerator for basis EPS		(19,674,324	)		(9,305,242	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(19,674,324	)	$	(9,305,242	)
Denominator:
Denominator for basic EPS-weighted- average    shares		33,348,263			30,102,158
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Warrants		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		33,348,263			30,102,158
Basic EPS	$	(0.59	)	$	(0.31	)
Diluted EPS	$	(0.59	)	$	(0.31	)

The effects of employee stock options and stock units, and warrants are excluded because they would be anti-dilutive due to the Company’s net loss.  

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Refer to Note 4 and Note 7 for impairment discussion.

Derivative Financial Instruments

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Fair Values of Financial Instruments

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;

• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The assets acquired and liabilities assumed in the Chromatin acquisition were valued at fair value on a non-recurring basis as of October 25, 2018.

The assets acquired and liabilities assumed in the Dow Wheat acquisition (see Note 7) were valued at fair value on a non-recurring basis as of August 15, 2019.

The assets acquired and liabilities assumed in the Pasture Genetics acquisitions (see Note 6) were valued at fair value on a non-recurring basis as of February 24, 2020.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates.

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	35,218	$	—
Contingent consideration obligations	$	—	$	—	$	4,263,503
Total	$	—	$	35,218	$	4,263,503

	Fair Value Measurements as of June 30, 2019 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	42,255	$	—
Total	$	—	$	42,255	$	—

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, or ASU 2017-04, effective July 1, 2018. This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance was applied during the goodwill impairment test in the fourth quarter of 2019.  See Note 7.

The Company adopted Accounting Standards Update No. 2016-02: Leases, or ASU 2016-02, effective July 1, 2019.  ASC 842 superseded previously existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position.

The adoption of ASC 842 resulted in the recognition of $2.6 million of right-of-use assets, or ROU assets, and $4.3 million related lease liabilities as of July 1, 2019, with no cumulative effect adjustment. The adoption of ASC 842 had no impact on the Company’s consolidated statement of operations and consolidated statement of cash flows.

The Company adopted ASC 842 on a modified retrospective approach at the effective date and, therefore, did not revise comparative period information or disclosure.  In addition, the Company elected the package of practical expedients permitted under ASC 842.

See “Note 3—Leases” for additional information on the adoption of ASC 842.

Recently Issued, but Not Yet Adopted, Accounting Pronouncements

Recently Issued, but Not Yet Adopted, Accounting Pronouncements

In August 2018, the FASB issued authoritative guidance intended to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.  This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.  The guidance also requires presentation of the capitalized implementation costs in the statement of financial position and in the statement of cash flows in the same line items that a prepayment for the fees of the association hosting arrangement would be presented, and the expense related to the capitalized implementation costs to be presented in the same line item in the statement of operations as the fees associated with the hosting element (service) of the arrangement.  This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted.  The Company’s adoption of ASU 2018-15 on July 1, 2020 is not expected to impact its consolidated financial statements and related disclosures.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of Revenues from External Customers by Country

The following table shows revenue from external sources by destination country:

	Years Ended June 30,
	2020				2019
United States	$	36,724,591	46	%	$	88,176,809	80	%
Australia		15,079,996	19	%		2,787,128	3	%
Saudi Arabia		9,189,291	12	%		4,745,993	4	%
Mexico		2,454,504	3	%		2,264,827	2	%
South Africa		2,182,553	3	%		797,722	1	%
Pakistan		2,124,038	3	%		1,009,120	1	%
Italy		1,400,641	2	%		326,364	0	%
Sudan		1,308,874	2	%		717,317	1	%
Libya		1,142,920	1	%		2,629,750	2	%
France		1,040,744	1	%		845,172	1	%
Other		6,934,046	8	%		5,422,309	5	%
Total	$	79,582,198	100	%	$	109,722,511	100	%

Components of Inventory

Components of inventory are:

	June 30, 2020		June 30, 2019
Raw materials and supplies	$	1,227,185	$	664,541
Work in progress		4,395,503		5,664,934
Finished goods		58,260,250		64,966,045
	$	63,882,938	$	71,295,520

Schedule of Calculation of Basic and Diluted EPS

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2020			2019
Numerator:
Net loss attributable to S&W Seed Company	$	(19,674,324	)	$	(9,305,242	)
Numerator for basis EPS		(19,674,324	)		(9,305,242	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(19,674,324	)	$	(9,305,242	)
Denominator:
Denominator for basic EPS-weighted- average    shares		33,348,263			30,102,158
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Warrants		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		33,348,263			30,102,158
Basic EPS	$	(0.59	)	$	(0.31	)
Diluted EPS	$	(0.59	)	$	(0.31	)

Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	35,218	$	—
Contingent consideration obligations	$	—	$	—	$	4,263,503
Total	$	—	$	35,218	$	4,263,503

	Fair Value Measurements as of June 30, 2019 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	42,255	$	—
Total	$	—	$	42,255	$	—

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Leases (Tables)

12 Months Ended

Jun. 30, 2020

Lessee Disclosure [Abstract]

Summary of Components of Lease Assets and Liabilities

The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification	June 30, 2020
Assets:
Right of use assets - operating leases	Other assets	$	4,137,255
Right of use assets - finance leases	Other assets	$	1,504,109
Accumulated amortization - finance leases	Other assets		(340,100	)
Right of use assets - finance leases, net	Other assets		1,164,009
Total lease assets		$	5,301,264
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	809,632
Current lease liabilities	Accrued expenses and other current liabilities		1,197,874
Long-term debt, net	Long-term debt, net		1,642,975
Long-term lease liabilities	Other non-current liabilities		3,242,548
Total lease liabilities		$	6,893,029

Summary of Components of Lease Cost

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended          June 30, 2020
Operating lease cost	Cost of revenue	$	299,126
Operating lease cost	Selling, general and administrative expenses		647,587
Operating lease cost	Research and development expenses		209,140
Finance lease cost	Depreciation and amortization and Interest expense		482,390
Total lease costs		$	1,638,243

Summary of Maturities of Lease Liabilities

Maturities of lease liabilities as of June 30, 2020 are as follows:

	Operating Leases			Finance Leases
2021	$	1,328,827		$	947,499
2022		1,130,311			863,678
2023		831,743			744,059
2024		762,849			139,808
2025		377,901		$	—
After 2025		483,792		$	—
Total lease payments		4,915,423			2,695,044
Less: Interest	$	(475,001	)	$	(242,437	)
Present value of lease liabilities	$	4,440,422		$	2,452,607

Schedule of Future Minimum Lease Payments for Operating Leases

Future minimum lease payments for operating leases accounted for under ASC 840, “Leases” in excess of one year at June 30, 2019 were as follows:

	June 30, 2019
2020	$	640,135
2021		634,422
2022		352,730
2023		201,800
2024		235,776
After 2024		366,581
Total	$	2,431,444

Summary of Weighted Average Assumptions on Lease Term and Discount Rate and Supplemental Cash Flow Information Related to Leases

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2020:

Operating lease remaining lease term	3.8 years
Operating lease discount rate		4.53	%
Finance lease remaining lease term	3.0 years
Finance lease discount rate		5.90	%
Cash paid for operating leases	$	875,317
Cash paid for finance leases	$	858,365

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CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2020	Jun. 30, 2019
CURRENT ASSETS
Cash and cash equivalents	$ 4,123,094	$ 3,431,802
Accounts receivable, net	19,023,098	13,380,464
Inventories, net	63,882,938	71,295,520
Prepaid expenses and other current assets	1,374,677	1,687,490
Assets held for sale	0	1,850,000
TOTAL CURRENT ASSETS	88,403,807	91,645,276
Property, plant and equipment, net	20,494,312	20,634,949
Intangibles, net	38,784,058	32,714,484
Goodwill	1,508,675	0
Other assets	6,764,781	1,369,560
TOTAL ASSETS	155,955,633	146,364,269
CURRENT LIABILITIES
Accounts payable	8,045,694	6,930,829
Deferred revenue	6,171,904	9,054,549
Accrued expenses and other current liabilities	9,618,892	6,073,110
Lines of credit, net	26,983,264	10,755,548
Current portion of long-term debt, net	1,780,522	1,113,502
TOTAL CURRENT LIABILITIES	52,600,276	33,927,538
Long-term debt, net, less current portion	14,328,823	12,158,095
Contingent consideration obligation	4,263,503	0
Other non-current liabilities	3,427,054	280,424
TOTAL LIABILITIES	74,619,656	46,366,057
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.001 par value; 50,000,000 shares authorized; 33,457,861 issued and 33,432,861 outstanding at June 30, 2020; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019;	33,458	33,303
Treasury stock, at cost, 25,000 shares	(134,196)	(134,196)
Additional paid-in capital	137,809,540	136,751,875
Accumulated deficit	(50,140,942)	(30,466,618)
Accumulated other comprehensive loss	(6,111,424)	(6,138,467)
Noncontrolling interests	(120,459)	(47,685)
TOTAL STOCKHOLDERS' EQUITY	81,335,977	99,998,212
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 155,955,633	$ 146,364,269

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Revenue Recognition (Tables)

12 Months Ended

Jun. 30, 2020

Revenues [Abstract]

Schedule of disaggregation of revenues

The following table disaggregates the Company's revenue by type of contract¹:

	Years Ended June 30,
	2020		2019
Pioneer product sales	$	19,681,450	$	37,605,215
Other product sales		57,896,346		37,647,297
Licensing		-		34,215,433
Services		2,004,402		254,566
	$	79,582,198	$	109,722,511

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Business Combinations (Tables)

12 Months Ended

Jun. 30, 2020

Chromatin

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of October 25, 2018:

	October 25, 2018
Cash and cash equivalents	$	95,049
Accounts receivable		947,015
Inventories		6,959,936
Prepaid expenses and other current assets		16,501
Property, plant and equipment		10,193,620
Assets held for sale		1,930,400
In-process research and development		380,000
Technology/IP - germplasm		7,200,000
Trade names		150,000
Goodwill		1,573,546
Current liabilities		(2,881,198	)
Noncurrent liabilities		(114,869	)
Total acquisition cost allocated	$	26,450,000

Assets Held for Sale

Management determined that one of the facilities acquired as part of the Chromatin acquisition would not be operated and is being held for sale. The components of that facility are:

Land and improvements	$	320,000
Buildings and improvements		1,380,000
Machinery and equipment		332,000
Less: Costs to sell		(101,600	)
Less: Fair value adjustment subsequently recorded		(1,316,093	)
Assets recorded as held for sale that have been subsequently sold	$	614,307

Useful Lives of Acquired Intangibles in business Combination

The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)	Estimated Fair Value
In-process research and development	n/a	$	380,000
Technology/IP - germplasm	30		7,200,000
Trade names	5		150,000
Total identifiable intangible assets		$	7,730,000

Business Acquisition, Pro Forma Information

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Year Ended June 30,
	2019
Revenue	$	111,359,688
Net loss	$	(11,179,299	)

Pasture Genetics

Business Acquisition [Line Items]

Schedule of Purchase Price Allocation

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the

acquisition date of February 24, 2020:

	February 24, 2020              (as reported)			Measurement Period Adjustments			February 24, 2020             (as adjusted)
Cash and cash equivalents	$	25,027		$	—		$	25,027
Accounts receivable		3,406,169			94,749			3,500,918
Inventories		6,145,876			(74,473	)		6,071,403
Prepaid expenses and other current assets		191,536			13,625			205,161
Property, plant and equipment		993,525			—			993,525
Right of use assets		—			365,033			365,033
Trade names		428,590			(26,375	)		402,215
Customer relationships		4,351,840			791,244			5,143,084
Goodwill		2,555,175			(1,102,739	)		1,452,436
Accounts payable		(4,254,043	)		219,932			(4,034,111	)
Current liabilities		(1,452,984	)		159,865			(1,293,119	)
Vehicle loans		(544,608	)		-			(544,608	)
Finance leases assumed		-			(365,033	)		(365,033	)
Other noncurrent liabilities		(16,399	)		-			(16,399	)
Total acquisition cost allocated	$	11,829,704		$	75,828		$	11,905,532

Useful Lives of Acquired Intangibles in business Combination

The values and useful lives of the acquired intangibles are as follows:

	Estimated Useful Life (Years)		Estimated Fair Value
Trade names		5	$	402,215
Customer Relationships		20		5,143,084
Total identifiable intangible assets			$	5,545,299

Business Acquisition, Pro Forma Information

The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2018.

	Years Ended June 30,
	2020			2019
Revenue	$	88,664,131		$	133,007,762
Net loss	$	(20,299,845	)	$	(9,623,060	)

Fair Value of Consideration Transferred

The acquisition-date fair value of the consideration transferred consisted of the following:

	February 24, 2020              (as reported)		Measurement Period Adjustments		February 24, 2020             (as adjusted)
Cash paid at closing	$	7,497,645	$	-	$	7,497,645
Contingent earn-out		4,332,059		75,828		4,407,887
Total purchase price	$	11,829,704	$	75,828	$	11,905,532

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Activity of Goodwill

The following table summarizes the activity of goodwill for the years ended June 30, 2020 and 2019, respectively.

	Balance at July 1, 2019		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2020
Goodwill	$	—	$	1,452,436	$	—	$	56,239	$	1,508,675

	Balance at July 1, 2018		Additions		Impairment			Currency Translation Adjustment		Balance at June 30, 2019
Goodwill	$	10,292,265	$	1,573,546	$	(11,865,811	)	$	—	$	—

Schedule of Intangible Assets

Intangible assets consist of the following:

	Balance at July 1, 2019		Additions		Impairment		Amortization			Currency Translation Adjustment		Balance at June 30, 2020
Trade name	$	1,205,346	$	402,215	$	—	$	(139,999	)	$	11,716	$	1,479,278
Customer relationships		1,055,747		5,143,084		—		(202,197	)		190,452		6,187,086
Non-compete		30,267		—		—		(8,955	)		—		21,312
GI customer list		64,475		—		—		(7,165	)		—		57,310
Supply agreement		1,002,154		—		—		(75,647	)		—		926,507
Grower relationships		1,647,800		—		—		(105,407	)		—		1,542,393
Intellectual property		26,786,468		—		—		(1,370,803	)		—		25,415,665
In process research and development		380,000		—		—		—			—		380,000
License agreement		—		2,400,863		—		(135,295	)		34,491		2,300,059
Internal use software		542,227		—		—		(67,779	)		—		474,448
	$	32,714,484	$	7,946,162	$	—	$	(2,113,247	)	$	236,659	$	38,784,058

	Balance at July 1, 2018		Additions		Impairment			Amortization			Currency Translation Adjustment		Balance at June 30, 2019
Trade name	$	1,159,826	$	150,000	$	—		$	(104,480	)	$	—	$	1,205,346
Customer relationships		1,156,955		—		—			(101,208	)		—		1,055,747
Non-compete		62,720		—		—			(32,453	)		—		30,267
GI customer list		71,639		—		—			(7,164	)		—		64,475
Supply agreement		1,077,783		—		—			(75,629	)		—		1,002,154
Distribution agreement		6,344,253		—		(5,991,792	)		(352,461	)		—		—
Grower relationships		1,753,208		—		—			(105,408	)		—		1,647,800
Intellectual property		20,873,393		7,200,000		—			(1,286,925	)		—		26,786,468
In process research and development		—		380,000		—			—			—		380,000
Internal use software		610,003		43,000		(43,000	)		(67,776	)		—		542,227
	$	33,109,780	$	7,773,000	$	(6,034,792	)	$	(2,133,504	)	$	—	$	32,714,484

Intangible Assets (Future Amortization)

Estimated aggregate remaining amortization is as follows:

	2021		2022		2023		2024		2025		Thereafter
Amortization expense	$	2,281,149	$	2,228,367	$	2,149,189	$	2,128,729	$	2,083,188	$	27,712,247

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Property, Plant and Equipment (Tables)

12 Months Ended

Jun. 30, 2020

Property Plant And Equipment [Abstract]

Components of Property, Plant and Equipment

Components of property, plant and equipment were as follows:

	June 30, 2020			June 30, 2019
Land and improvements	$	2,157,663		$	2,150,085
Buildings and improvements		10,014,879			10,018,108
Machinery and equipment		13,550,413			12,579,698
Vehicles		2,087,634			2,099,814
Leasehold Improvements		552,810			—
Construction in progress		71,316			66,921
Total property, plant and equipment		28,434,715			26,914,626
Less: accumulated depreciation		(7,940,403	)		(6,279,677	)
Property, plant and equipment, net	$	20,494,312		$	20,634,949

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Debt (Tables)

12 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Total Debt Outstanding

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2020			June 30, 2019
Working capital lines of credit
KeyBank	$	—		$	2,350,000
CIBC		11,205,664			—
National Australia Bank Limited		16,437,600			8,426,400
National Australia Bank Limited Overdraft Facility		—			351,544
Debt issuance costs		(660,000	)		(372,396	)
Total working capital lines of credit, net	$	26,983,264		$	10,755,548
Current portion of long-term debt
Finance leases	$	809,632		$	563,087
Debt issuance costs		(8,154	)	$	(11,070	)
Term Loan - National Australia    Bank Limited		342,450			73,731
Machinery & equipment loans -    National Australia Bank Limited		272,997			215,519
Vehicle loans - Toyota Finance		200,779			—
Unsecured subordinate promissory note		—			100,000
Secured real estate note - Conterra		202,374			247,942
Debt issuance costs		(39,556	)		(75,707	)
Total current portion, net		1,780,522			1,113,502
Long-term debt, less current portion
Finance leases		1,642,975			1,709,481
Debt issuance costs		(6,923	)		(15,078	)
Term loan - National Australia    Bank Limited		3,082,050			256,303
Machinery & equipment loans -    National Australia Bank Limited		396,404			309,988
Vehicle loans - Toyota Finance		313,470			—
Secured real estate note - Conterra		8,956,885			9,922,269
Debt issuance costs		(56,038	)		(24,869	)
Total long-term portion, net		14,328,823			12,158,095
Total debt, net	$	16,109,345		$	13,271,596

Schedule of Annual Maturities of Short-Term and Long-Term Debt

The annual maturities of short-term and long-term debt are as follows:

Fiscal Year	Amount
2021	$	1,828,232
2022		1,768,958
2023		9,985,645
2024		555,441
2025		369,491
Thereafter		1,712,250
Total	$	16,220,017

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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of Loss Before Income Taxes

Loss before income taxes consists of the following:

	Years Ended June 30,
	2020			2019
United States	$	(18,778,030	)	$	(9,336,700	)
Foreign		(583,100	)		(164,974	)
Loss before income taxes	$	(19,361,130	)	$	(9,501,674	)

Components of Provision for Income Taxes

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2020		2019
Current:
Federal	$	—	$	—
State		15,972		28,591
Foreign		369,996		92,744
Total current provision		385,968		121,335
Deferred:
Federal		—		(227,142	)
State		—		(42,940	)
Foreign		—		—
Total deferred provision (benefit)		—		(270,082	)
Provision (Benefit) for income taxes	$	385,968	$	(148,747	)

Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate

The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2020			2019
Tax benefit at statutory tax rate	$	(4,065,839	)	$	(1,995,352	)
State benefit, net of federal benefit		(387,398	)		(304,015	)
Other permanent differences		134,141			23,786
Federal and state research credits - current year		(239,373	)		(228,039	)
Foreign rate differential		170,693			10,819
Shortfall on restricted stock vest		10,526			49,118
Change in unrecognized tax benefit		11,778			49,939
Valuation allowance		4,540,563			2,265,361
Other		210,877			(20,364	)
	$	385,968		$	(148,747	)

Schedule of Deferred Tax Assets

Significant components of the Company's deferred tax assets are shown below.

	June 30,
	2020			2019
Deferred tax assets:
Net operating loss carry forwards	$	10,681,884		$	5,817,688
Compensation accruals		478,696			261,365
Allowance for bad debts		1,338,083			1,376,388
Stock compensation		444,725			288,648
Tax credit carry forwards		901,656			662,283
Intangible assets		1,628,858			2,226,539
Lease liability		1,126,905			—
Deferred rent		—			47,226
Assets held for sale		—			367,387
163(j) limitation interest		349,003			—
Other, net		693,637			476,411
Total deferred tax assets		17,643,447			11,523,935
Valuation allowance for deferred tax assets		(14,656,843	)		(9,774,130	)
Deferred tax assets, net of valuation allowance		2,986,604			1,749,805
Deferred tax liabilities
ROU lease asset		(1,253,577	)		—
Fixed assets		(1,733,027	)		(1,749,805	)
Total deferred tax liabilities		(2,986,604	)		(1,749,805	)
Net deferred tax asset / (liability)	$	—		$	—

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Warrants (Tables)

12 Months Ended

Jun. 30, 2020

Warrants And Rights Note Disclosure [Abstract]

Schedule of Warrants Outstanding

The following table summarizes the total warrants outstanding at June 30, 2020:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2019		New Issuances		Expired			Outstanding as of June 30, 2020
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		(2,699,999	)		—
						2,699,999		—		(2,699,999	)		—

The following table summarizes the total warrants outstanding at June 30, 2019:

	Issue Date	Exercise Price Per Share		Expiration Date	Outstanding as of June 30, 2018		New Issuances		Expired		Outstanding as of June 30, 2019
Warrants	Dec 2014	$	4.32	June 2020		2,699,999		—		—		2,699,999
						2,699,999		—		—		2,699,999

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Equity-Based Compensation (Tables)

12 Months Ended

Jun. 30, 2020

Summary of Activity Related to Non-Vested Restricted Stock Units

A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2018		89,193		$	3.98		1.1
Granted		175,758			2.69		2.8
Vested		(107,747	)		3.75		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2019		157,204			2.69		1.4
Granted		417,933			2.25		2.8
Vested		(177,010	)		2.45		—
Forfeited		(1,324	)		2.83		—
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6

Stock Options

Schedule of Weighted Average Assumptions Used in Black-Scholes-Merton Model

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	June 30,
	2020			2019
Risk free rate	0.3%-1.66%			1.9% - 3.0%
Dividend yield		0	%		0	%
Volatility	39.4%-48.9%			34.5% - 41.5%
Average forfeiture assumptions		1.1	%		1.1	%

Summary of Stock Option Activity

A summary of stock option activity for the years ended June 30, 2020 and 2019 is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2018		792,074		$	4.55		6.3	$	10,413
Granted		497,178			2.85		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(166,500	)		6.17		—		—
Outstanding at June 30, 2019		1,122,752			3.55		8.0		34,135
Granted		1,899,934			2.36		—		—
Exercised		—			—		—		—
Canceled/forfeited/expired		(146,792	)		4.12		—		—
Outstanding at June 30, 2020		2,875,894			2.74		8.6		22,409
Options vested and exercisable at June 30, 2020		1,079,783			3.21		7.6		—
Options vested and expected to vest as of    June 30, 2020		2,866,236		$	2.72		8.6	$	22,311

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Non-Cash Activities for Statements of Cash Flows (Tables)

12 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the years ended June 30, 2020 and 2019, respectively.

	Years Ended June 30,
	2020			2019
Purchases of equipment classified as finance lease		(468,390	)		(574,018	)
Contingent consideration issued		(4,407,887	)		—

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Background and Organization - Additional Information (Details) $ in Millions	1 Months Ended
	Aug. 30, 2019 USD ($)	Jun. 30, 2020
Minimum
Background And Organizations [Line Items]
Number of countries in which S&W operates		40
S&W Australia
Background And Organizations [Line Items]
One time license fee	$ 2.3
Purchase price of equipment	$ 0.3
License initial term	15 years

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Jun. 30, 2019
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	33,457,861	33,303,218
Common stock, shares outstanding	33,432,861	33,278,218
Treasury stock, shares	25,000	25,000

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Summary of Significant Accounting Policies - Additional Information (Details)	1 Months Ended	3 Months Ended	12 Months Ended
	Feb. 29, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) Customer Reporting	Jun. 30, 2019 USD ($) Customer	Jul. 01, 2019 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Current assets (restricted)		$ 600,000	$ 1,300,000	$ 600,000
Current liabilities (nonrecourse)		$ 200,000	$ 200,000	$ 200,000
Net book value of fixed assets located outside the United States, percent of total		11.00%	17.00%	11.00%
Cash balances located outside of the United States		$ 236,822	$ 1,690,748	$ 236,822
Disclosure on Geographic Areas, Fixed Assets			The net book value of fixed assets located outside the United States was 17% and 11% of total fixed assets at June 30, 2020 and June 30, 2019, respectively. Cash balances located outside of the United States may not be insured and totaled $1,690,748 and $236,822 at June 30, 2020 and June 30, 2019, respectively.
Allowance for doubtful trade receivables		1,576,900	$ 1,366,220	1,576,900
Recognized write-down of inventory			2,344,800	8,822,103
Goodwill acquire transaction			$ 1,452,436	1,573,546
Number of reporting units | Reporting			1
Goodwill impairment charges			$ 0	11,865,811
Adjustments for impairment or observable transactions			0	0
Right-of-use assets			4,137,255		$ 2,600,000
Lease liabilities			$ 4,440,422		$ 4,300,000
Operating Lease, Liability, Statement of Financial Position [Extensible List]			us-gaap:OtherLiabilities		us-gaap:OtherLiabilities
ASU 2017-04
Summary Of Significant Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]			true
Change in Accounting Principle, Accounting Standards Update, Adoption Date			Jul. 01, 2018
ASU 2016-02
Summary Of Significant Accounting Policies [Line Items]
Change in Accounting Principle, Accounting Standards Update, Adopted [true false]			true
Change in Accounting Principle, Accounting Standards Update, Adoption Date			Jul. 01, 2019
Other Assets
Summary Of Significant Accounting Policies [Line Items]
Carrying value of investment		1,300,000	$ 1,300,000	$ 1,300,000
Pasture Genetics
Summary Of Significant Accounting Policies [Line Items]
Goodwill acquire transaction	$ 1,452,436
Minimum | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life			10 years
Minimum | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life			5 years
Minimum | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life			5 years
Minimum | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life			3 years
Maximum | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life			30 years
Maximum | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life			20 years
Maximum | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life			20 years
Maximum | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life			20 years
Weighted Average | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life			26 years
Weighted Average | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life			20 years
Weighted Average | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life			15 years
Weighted Average | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life			16 years
Building | Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			5 years
Building | Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			35 years
Machinery and Equipment | Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			2 years
Machinery and Equipment | Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			20 years
Vehicles | Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			2 years
Vehicles | Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives			5 years
Cost of Revenue
Summary Of Significant Accounting Policies [Line Items]
Recognized write-down of inventory		8,800,000
Cost of Revenue | Dormant Alfalfa Seed Products
Summary Of Significant Accounting Policies [Line Items]
Recognized write-down of inventory		$ 4,800,000
Argentina | Maximum
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in Bioceres, S.A.			1.00%
Customer Concentration Risk | Revenue
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer			1	1
Concentration risk, percentage			26.00%	65.00%
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer			1	1
Concentration risk, percentage			21.00%	19.00%
Geographic Concentration Risk | Revenue | Non-US
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage			54.00%	20.00%
SeedVision | Variable Interest Entity
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in variable interest entity			50.10%
Sorghum Solutions | Variable Interest Entity
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in variable interest entity			51.00%

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Summary of Significant Accounting Policies - Schedule of Revenues from External Customers by Country (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 79,582,198	$ 109,722,511
Revenue from external customers by country, percentage	100.00%	100.00%
United States
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 36,724,591	$ 88,176,809
Revenue from external customers by country, percentage	46.00%	80.00%
Australia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 15,079,996	$ 2,787,128
Revenue from external customers by country, percentage	19.00%	3.00%
Saudi Arabia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 9,189,291	$ 4,745,993
Revenue from external customers by country, percentage	12.00%	4.00%
Mexico
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 2,454,504	$ 2,264,827
Revenue from external customers by country, percentage	3.00%	2.00%
South Africa
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 2,182,553	$ 797,722
Revenue from external customers by country, percentage	3.00%	1.00%
Pakistan
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 2,124,038	$ 1,009,120
Revenue from external customers by country, percentage	3.00%	1.00%
Italy
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,400,641	$ 326,364
Revenue from external customers by country, percentage	2.00%	0.00%
Sudan
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,308,874	$ 717,317
Revenue from external customers by country, percentage	2.00%	1.00%
Libya
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,142,920	$ 2,629,750
Revenue from external customers by country, percentage	1.00%	2.00%
France
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,040,744	$ 845,172
Revenue from external customers by country, percentage	1.00%	1.00%
Other
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 6,934,046	$ 5,422,309
Revenue from external customers by country, percentage	8.00%	5.00%

XML

Summary of Significant Accounting Policies - Components of Inventory (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 1,227,185	$ 664,541
Work in progress	4,395,503	5,664,934
Finished goods	58,260,250	64,966,045
Inventories	$ 63,882,938	$ 71,295,520

XML

Summary of Significant Accounting Policies - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss attributable to S&W Seed Company	$ (19,674,324)	$ (9,305,242)
Numerator for basis EPS	(19,674,324)	(9,305,242)
Effect of dilutive securities:
Warrants	0	0
Total effect of dilutive securities:	0	0
Numerator for diluted EPS	$ (19,674,324)	$ (9,305,242)
Denominator:
Denominator for basic EPS-weighted- average shares	33,348,263	30,102,158
Effect of dilutive securities:
Employee stock options	0	0
Employee restricted stock units	0	0
Warrants	0	0
Dilutive potential common shares	0	0
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions	33,348,263	30,102,158
Basic EPS	$ (0.59)	$ (0.31)
Diluted EPS	$ (0.59)	$ (0.31)

XML

Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Level 1
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	$ 0	$ 0
Contingent consideration obligations	0
Total	0	0
Level 2
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	35,218	42,255
Contingent consideration obligations	0
Total	35,218	42,255
Level 3
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	0	0
Contingent consideration obligations	4,263,503
Total	$ 4,263,503	$ 0

XML

Leases - Additional Information (Details)	12 Months Ended
	Jun. 30, 2020
Operating And Finance Lease [Line Items]
Lessee, operating lease, option to extend, description	If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease.
Lessee, operating lease, option to extend	true
Maximum
Operating And Finance Lease [Line Items]
Lease agreements term	1 year

XML

Leases - Summary of Components of Lease Assets and Liabilities (Details) - USD ($)	Jun. 30, 2020	Jul. 01, 2019	Jun. 30, 2019
Lessee Disclosure [Abstract]
Right of use assets - operating leases	$ 4,137,255	$ 2,600,000
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent
Right of use assets - finance leases	$ 1,504,109
Accumulated amortization - finance leases	(340,100)
Right of use assets - finance leases, net	$ 1,164,009
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent
Total lease assets	$ 5,301,264
Current portion of long-term debt, net	$ 809,632		$ 563,087
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent
Current lease liabilities	$ 1,197,874
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherAccruedLiabilitiesCurrent
Long-term debt, net	$ 1,642,975		$ 1,709,481
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtAndCapitalLeaseObligations
Long-term lease liabilities	$ 3,242,548
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent
Total lease liabilities	$ 6,893,029

XML

Leases - Summary of Components of Lease Cost (Details)	12 Months Ended
	Jun. 30, 2020 USD ($)
Lessee Lease Description [Line Items]
Total lease costs	$ 1,638,243
Cost of Revenue
Lessee Lease Description [Line Items]
Operating lease cost	299,126
Selling, General and Administrative Expenses
Lessee Lease Description [Line Items]
Operating lease cost	647,587
Research and Development Expenses
Lessee Lease Description [Line Items]
Operating lease cost	209,140
Depreciation and Amortization and Interest Expense
Lessee Lease Description [Line Items]
Finance lease cost	$ 482,390

XML

Leases - Summary of Maturities of Lease Liabilities (Details) - USD ($)	Jun. 30, 2020	Jul. 01, 2019
Operating Leases
2021	$ 1,328,827
2022	1,130,311
2023	831,743
2024	762,849
2025	377,901
After 2025	483,792
Total lease payments	4,915,423
Less: Interest	(475,001)
Present value of lease liabilities	$ 4,440,422	$ 4,300,000
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilities	us-gaap:OtherLiabilities
Finance Leases
2021	$ 947,499
2022	863,678
2023	744,059
2024	139,808
Total lease payments	2,695,044
Less: Interest	(242,437)
Present value of lease liabilities	$ 2,452,607
Finance Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtAndCapitalLeaseObligationsIncludingCurrentMaturities

XML

Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details)	Jun. 30, 2019 USD ($)
Lessee Disclosure [Abstract]
2020	$ 640,135
2021	634,422
2022	352,730
2023	201,800
2024	235,776
After 2024	366,581
Total	$ 2,431,444

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue
Total revenue	$ 79,582,198	$ 109,722,511
Cost of revenue
Total cost of revenue	$ 64,647,936	$ 69,014,490
Type of Cost, Good or Service [Extensible List]	sanw:SeedMillingAndResearchAndDevelopmentServicesMember	sanw:SeedMillingAndResearchAndDevelopmentServicesMember
Gross profit	$ 14,934,262	$ 40,708,021
Operating expenses
Selling, general and administrative expenses	21,348,092	17,486,071
Research and development expenses	7,336,754	6,272,758
Depreciation and amortization	5,036,464	4,128,546
Gain on disposal of property, plant and equipment	(23,299)	(86,222)
Goodwill impairment charges	0	11,865,811
Intangible asset impairment charges	0	6,034,792
Total operating expenses	33,698,011	45,701,756
Loss from operations	(18,763,749)	(4,993,735)
Other (income) expense
Foreign currency loss (gain)	98,620	(99,467)
Reduction of anticipated loss on sub-lease land	0	(141,373)
Change in estimated value of assets held for sale	92,931	1,521,855
Change in contingent consideration obligation	(302,139)	0
Government grant income	(1,958,600)	0
Loss on extinguishment of debt	140,638	0
Interest expense - amortization of debt discount	555,049	340,847
Interest expense	1,970,882	2,886,077
Loss before income taxes	(19,361,130)	(9,501,674)
Provision for income taxes	385,968	(148,747)
Net loss	(19,747,098)	(9,352,927)
Net loss attributed to noncontrolling interests	(72,774)	(47,685)
Net loss attributable to S&W Seed Company	$ (19,674,324)	$ (9,305,242)
Net loss attributable to S&W Seed Company per common share:
Basic	$ (0.59)	$ (0.31)
Diluted	$ (0.59)	$ (0.31)
Weighted average number of common shares outstanding:
Basic	33,348,263	30,102,158
Diluted	33,348,263	30,102,158
Product and Other
Revenue
Total revenue	$ 79,582,198	$ 75,507,078
Licensing
Revenue
Total revenue	$ 0	$ 34,215,433

XML

Leases - Summary of Weighted Average Assumptions on Lease Term and Discount Rate and Supplemental Cash Flow Information Related to Leases (Details)	12 Months Ended
	Jun. 30, 2020 USD ($)
Lessee Disclosure [Abstract]
Operating lease remaining lease term	3 years 9 months 18 days
Operating lease discount rate	4.53%
Finance lease remaining lease term	3 years
Finance lease discount rate	5.90%
Cash paid for operating leases	$ 875,317
Cash paid for finance leases	$ 858,365

XML

Pioneer Relationship - Additional Information (Details) - USD ($)	1 Months Ended				12 Months Ended
	Feb. 29, 2020	Jan. 31, 2020	Sep. 30, 2019	May 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
Impairment charge on intangible assets					$ 0	$ 6,034,792
Goodwill impairment charges					0	11,865,811
Revenue					$ 79,582,198	109,722,511
Pioneer | Alfalfa Seeds
Related Party Transaction [Line Items]
Termination date					May 22, 2019
Impairment charge on intangible assets						6,000,000
Goodwill impairment charges						11,900,000
Corteva and Pioneer
Related Party Transaction [Line Items]
Payments received from related parties	$ 5,550,000	$ 5,550,000	$ 5,550,000	$ 45,000,000
Quarterly payments receivable from related parties					$ 8,400,000
Description of related party quarterly payments					Receive quarterly payments through February 2021
Unbilled receivable at contract termination					$ 1,800,000
Corteva and Pioneer | Alfalfa Seeds
Related Party Transaction [Line Items]
Revenue						$ 34,200,000

XML

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Disaggregation Of Revenue [Line Items]
Total revenue	$ 79,582,198	$ 109,722,511
Pioneer product sales
Disaggregation Of Revenue [Line Items]
Total revenue	19,681,450	37,605,215
Other product sales
Disaggregation Of Revenue [Line Items]
Total revenue	57,896,346	37,647,297
Licensing
Disaggregation Of Revenue [Line Items]
Total revenue	0	34,215,433
Services
Disaggregation Of Revenue [Line Items]
Total revenue	$ 2,004,402	$ 254,566

XML

Revenue Recognition - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Revenue Recognition [Line Items]
Finished unit maximum price adjustment percentage per year	4.00%
Price determination period for sales season	1 year
Maximum term of payments for transfer goods and services	1 year
Unbilled receivables billing term	3 months
Bad debt expense	$ (255,000)	$ 996,461
Revenue recognized	$ 9,100,000	$ 200,000
Minimum
Revenue Recognition [Line Items]
Term of customer invoice payment	30 days
Maximum
Revenue Recognition [Line Items]
Term of customer invoice payment	120 days

XML

Business Combinations - Additional Information (Details) $ in Millions			1 Months Ended	8 Months Ended	12 Months Ended
	Feb. 24, 2020 USD ($)	Feb. 24, 2020 AUD ($)	Nov. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Feb. 24, 2020 AUD ($)	Oct. 25, 2018 USD ($)	Jun. 30, 2018 USD ($)
Business Acquisition [Line Items]
Net proceeds from sale of land and buildings			$ 614,307		$ 34,410	$ 567,492
Goodwill				$ 0	1,508,675	0			$ 10,292,265
Net loss					(19,674,324)	(9,305,242)
Fair value of contingent consideration				0	$ 4,263,503	0
Chromatin
Business Acquisition [Line Items]
Business Acquisition, Description of Acquired Entity					On October 25, 2018, the Company completed the acquisition of substantially all of the assets of Chromatin, Inc., or together with certain of its subsidiaries and affiliates in receivership, Chromatin, as well as the assumption of certain contracts and limited specified liabilities of Chromatin, for an aggregate cash purchase price of approximately $26.5 million, or the Acquisition, pursuant to the terms of its Asset Purchase Agreement, dated September 14, 2018, with Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, or Novo.
Total acquisition cost allocated								$ 26,450,000
Estimated fair value of accounts receivable acquired								947,015
Business Combination, Acquired Receivables, Gross Contractual Amount								2,164,476
Business Combination, Acquired Receivables, Estimated Uncollectible								1,217,461
Goodwill								$ 1,573,546
Business Combination, Goodwill Recognized, Description					The estimated fair value of accounts receivable acquired is $947,015, with the gross contractual amount totaling $2,164,476, less $1,217,461 expected to be uncollectible. The current liabilities assumed relate to inventory acquired in the acquisition as well as customer deposits. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,573,546, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology, and the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.
Revenue				12,400,000
Net loss				$ (1,700,000)
Elimination of acquisition charges						1,196,476
Amortization of acquired intangibles						132,222
Depreciation of acquired property, plant and equipment						$ 358,273
Business Acquisition, Pro Forma Information, Description						For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 includes (i) the elimination of acquisition charges of $1,196,476; (ii) amortization of acquired intangibles of $132,222; and (iii) depreciation of acquired property, plant and equipment of $358,273.
Chromatin | Selling, General and Administrative Expenses
Business Acquisition [Line Items]
Acquisitions costs						$ 1,196,476
Pasture Genetics
Business Acquisition [Line Items]
Total acquisition cost allocated	$ 11,905,532
Estimated fair value of accounts receivable acquired	3,500,918
Business Combination, Acquired Receivables, Gross Contractual Amount	3,610,566
Business Combination, Acquired Receivables, Estimated Uncollectible	109,648
Goodwill	$ 1,452,436
Business Combination, Goodwill Recognized, Description					The estimated fair value of accounts receivable acquired was $3,500,918, with the gross contractual amount totaling $3,610,566, less $109,648 expected to be uncollectible. The current liabilities assumed primarily relate to grower payables as well as employee-related obligations. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,452,436, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to manage the acquired business, the trained workforce and access to new the distribution channels. Goodwill is not amortized for financial reporting purposes but is amortized for tax purposes.
Elimination of acquisition charges					$ 476,454
Amortization of acquired intangibles					327,707	$ 327,707
Date of acquisition	Feb. 24, 2020	Feb. 24, 2020
Upfront cash payment	$ 7,500,000	$ 11.4
Potential earn-out payment date	Sep. 30, 2022	Sep. 30, 2022
Earn-out payment earnings multiplier	7.5	7.5
Earn-out payment base limit	$ 7,500,000						$ 11.4
Business combination contingent consideration additional amount	5,300,000						8.0
Fair value of contingent consideration	$ 4,407,887				4,095,702
Present value discount factor	8.00%	8.00%
Net income volatility	35.00%	35.00%
Pasture Genetics | Maximum
Business Acquisition [Line Items]
Potential earn-out payable	$ 5,300,000						$ 8.0
Percentage of earn-out to be paid in common stock	50.00%	50.00%
Pasture Genetics | Selling, General and Administrative Expenses
Business Acquisition [Line Items]
Acquisitions costs					$ 476,454

XML

Business Combinations (Purchase Price Allocation and Assets Held for Sale) (Details) - USD ($)	1 Months Ended
	Oct. 25, 2018	Jun. 30, 2020	Feb. 24, 2020	Jun. 30, 2019	Jun. 30, 2018
Business Acquisition [Line Items]
Goodwill		$ 1,508,675		$ 0	$ 10,292,265
Chromatin
Business Acquisition [Line Items]
Cash and cash equivalents	$ 95,049
Accounts receivable	947,015
Inventories	6,959,936
Prepaid expenses and other current assets	16,501
Property, plant and equipment	10,193,620
Assets held for sale	1,930,400
In-process research and development	380,000
Technology/IP - germplasm	7,200,000
Trade names	150,000
Goodwill	1,573,546
Current liabilities	(2,881,198)
Noncurrent liabilities	(114,869)
Total acquisition cost allocated	26,450,000
Assets held for sale
Land and improvements	320,000
Buildings and improvements	1,380,000
Machinery and equipment	332,000
Less: Costs to sell	(101,600)
Less: Fair value adjustment subsequently recorded	(1,316,093)
Assets recorded as held for sale that have been subsequently sold	$ 614,307
Pasture Genetics
Business Acquisition [Line Items]
Cash and cash equivalents			$ 25,027
Accounts receivable			3,500,918
Inventories			6,071,403
Prepaid expenses and other current assets			205,161
Property, plant and equipment			993,525
Right of use assets			365,033
Trade names			402,215
Customer relationships			5,143,084
Goodwill			1,452,436
Accounts payable			(4,034,111)
Current liabilities			(1,293,119)
Vehicle loans			(544,608)
Finance leases assumed			(365,033)
Other noncurrent liabilities			(16,399)
Total acquisition cost allocated			11,905,532
Pasture Genetics | As Reported
Business Acquisition [Line Items]
Cash and cash equivalents			25,027
Accounts receivable			3,406,169
Inventories			6,145,876
Prepaid expenses and other current assets			191,536
Property, plant and equipment			993,525
Trade names			428,590
Customer relationships			4,351,840
Goodwill			2,555,175
Accounts payable			(4,254,043)
Current liabilities			(1,452,984)
Vehicle loans			(544,608)
Other noncurrent liabilities			(16,399)
Total acquisition cost allocated			11,829,704
Pasture Genetics | Measurement Period Adjustments
Business Acquisition [Line Items]
Accounts receivable			94,749
Inventories			(74,473)
Prepaid expenses and other current assets			13,625
Right of use assets			365,033
Trade names			(26,375)
Customer relationships			791,244
Goodwill			(1,102,739)
Accounts payable			219,932
Current liabilities			159,865
Finance leases assumed			(365,033)
Total acquisition cost allocated			$ 75,828

XML

Business Combinations (Acquired Intangibles (Value and Useful Lives) (Details) - USD ($)		1 Months Ended
	Feb. 24, 2020	Oct. 25, 2018
Chromatin | In-process research and development
Finite Lived Intangible Assets [Line Items]
Fair value of asset		$ 380,000
Chromatin | Technology/IP - germplasm
Finite Lived Intangible Assets [Line Items]
Fair value of asset		$ 7,200,000
Estimated Useful Life (years)		30 years
Chromatin | Trade names
Finite Lived Intangible Assets [Line Items]
Fair value of asset		$ 150,000
Estimated Useful Life (years)		5 years
Chromatin | Total identifiable intangible assets
Finite Lived Intangible Assets [Line Items]
Fair value of asset		$ 7,730,000
Pasture Genetics | Trade names
Finite Lived Intangible Assets [Line Items]
Fair value of asset	$ 402,215
Estimated Useful Life (years)	5 years
Pasture Genetics | Customer Relationships
Finite Lived Intangible Assets [Line Items]
Fair value of asset	$ 5,143,084
Estimated Useful Life (years)	20 years
Pasture Genetics | Total identifiable intangible assets
Finite Lived Intangible Assets [Line Items]
Fair value of asset	$ 5,545,299

XML

Business Combinations (Pro Forma Financial Information) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Chromatin
Business Acquisition [Line Items]
Revenue		$ 111,359,688
Net loss		(11,179,299)
Pasture Genetics
Business Acquisition [Line Items]
Revenue	$ 88,664,131	133,007,762
Net loss	$ (20,299,845)	$ (9,623,060)

XML

Business Combinations (Fair Value of Consideration Transferred) (Details) - Pasture Genetics	Feb. 24, 2020 USD ($)
Business Acquisition [Line Items]
Cash paid at closing	$ 7,497,645
Contingent earn-out	4,407,887
Total purchase price	11,905,532
As Reported
Business Acquisition [Line Items]
Cash paid at closing	7,497,645
Contingent earn-out	4,332,059
Total purchase price	11,829,704
Measurement Period Adjustments
Business Acquisition [Line Items]
Contingent earn-out	75,828
Total purchase price	$ 75,828

XML

Goodwill and Intangible Assets - Additional Information (Details)		1 Months Ended	12 Months Ended
	Aug. 15, 2019 USD ($)	Feb. 29, 2020 USD ($)	Jun. 30, 2020 USD ($) Reporting	Jun. 30, 2019 USD ($)
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction			$ 1,452,436	$ 1,573,546
Number of reporting units | Reporting			1
Discrete cash flow period			10 years
Percentage of fair value in excess of carrying amount			10.00%
Goodwill impairment charges			$ 0	11,865,811
Impairment charge on intangible assets			0	6,034,792
Amortization expense			2,113,247	2,133,504
Purchase price allocated to license			7,946,162	$ 7,773,000
License agreement
Goodwill And Intangible Assets [Line Items]
Amortization expense			135,295
Purchase price allocated to license			$ 2,400,863
Wheat Assets Acquisition Program | Dow AgroScience
Goodwill And Intangible Assets [Line Items]
Effective date of wheat assets purchase agreement	Aug. 15, 2019
Prepaid license agreement term	15 years
License agreement renewal option	5 years
Purchase price, paid in cash	$ 2,600,000
Amortization of license agreement	15 years
Purchase price allocated to fixed assets	$ 200,000
Wheat Assets Acquisition Program | Dow AgroScience | Minimum
Goodwill And Intangible Assets [Line Items]
Estimated useful lives	3 years
Wheat Assets Acquisition Program | Dow AgroScience | Maximum
Goodwill And Intangible Assets [Line Items]
Estimated useful lives	5 years
Wheat Assets Acquisition Program | Dow AgroScience | License agreement
Goodwill And Intangible Assets [Line Items]
Purchase price allocated to license	$ 2,400,000
Valuation Income Approach | Measurement Input Discount Rate
Goodwill And Intangible Assets [Line Items]
Percentage of goodwill impairment			10.60%
Pasture Genetics
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction		$ 1,452,436

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (19,747,098)	$ (9,352,927)
Foreign currency translation adjustment, net of income taxes	27,043	(347,805)
Comprehensive loss	(19,720,055)	(9,700,732)
Comprehensive loss attributable to noncontrolling interests	(72,774)	(47,685)
Comprehensive loss attributable to S&W Seed Company	$ (19,647,281)	$ (9,653,047)

XML

Goodwill and Intangible Assets - Summary of Activity of Goodwill (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning Balance	$ 0	$ 10,292,265
Goodwill additions	1,452,436	1,573,546
Goodwill Impairment	0	(11,865,811)
Goodwill currency translation adjustment	56,239	0
Goodwill, Ending Balance	$ 1,508,675	$ 0

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Finite Lived Intangible Assets [Line Items]
Intangible asset	$ 32,714,484	$ 33,109,780
Intangible addition	7,946,162	7,773,000
Intangible Impairment	0	(6,034,792)
Intangible amortization expense	(2,113,247)	(2,133,504)
Intangible currency translation adjustment	236,659	0
Intangible asset	38,784,058	32,714,484
Trade Name
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,205,346	1,159,826
Intangible addition	402,215	150,000
Intangible Impairment	0	0
Intangible amortization expense	(139,999)	(104,480)
Intangible currency translation adjustment	11,716	0
Intangible asset	1,479,278	1,205,346
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,055,747	1,156,955
Intangible addition	5,143,084	0
Intangible Impairment	0	0
Intangible amortization expense	(202,197)	(101,208)
Intangible currency translation adjustment	190,452	0
Intangible asset	6,187,086	1,055,747
Non-compete
Finite Lived Intangible Assets [Line Items]
Intangible asset	30,267	62,720
Intangible addition	0	0
Intangible Impairment	0	0
Intangible amortization expense	(8,955)	(32,453)
Intangible currency translation adjustment	0	0
Intangible asset	21,312	30,267
GI Customer list
Finite Lived Intangible Assets [Line Items]
Intangible asset	64,475	71,639
Intangible addition	0	0
Intangible Impairment	0	0
Intangible amortization expense	(7,165)	(7,164)
Intangible currency translation adjustment	0	0
Intangible asset	57,310	64,475
Supply Agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,002,154	1,077,783
Intangible addition	0	0
Intangible Impairment	0	0
Intangible amortization expense	(75,647)	(75,629)
Intangible currency translation adjustment	0	0
Intangible asset	926,507	1,002,154
Distribution agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	0	6,344,253
Intangible addition		0
Intangible Impairment		(5,991,792)
Intangible amortization expense		(352,461)
Intangible currency translation adjustment		0
Intangible asset		0
Grower Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,647,800	1,753,208
Intangible addition	0	0
Intangible Impairment	0	0
Intangible amortization expense	(105,407)	(105,408)
Intangible currency translation adjustment	0	0
Intangible asset	1,542,393	1,647,800
Intellectual Property
Finite Lived Intangible Assets [Line Items]
Intangible asset	26,786,468	20,873,393
Intangible addition	0	7,200,000
Intangible Impairment	0	0
Intangible amortization expense	(1,370,803)	(1,286,925)
Intangible currency translation adjustment	0	0
Intangible asset	25,415,665	26,786,468
In-process research and development
Finite Lived Intangible Assets [Line Items]
Intangible asset	380,000	0
Intangible addition	0	380,000
Intangible Impairment	0	0
Intangible amortization expense	0	0
Intangible currency translation adjustment	0	0
Intangible asset	380,000	380,000
License agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	0
Intangible addition	2,400,863
Intangible Impairment	0
Intangible amortization expense	(135,295)
Intangible currency translation adjustment	34,491
Intangible asset	2,300,059	0
Internal use software
Finite Lived Intangible Assets [Line Items]
Intangible asset	542,227	610,003
Intangible addition	0	43,000
Intangible Impairment	0	(43,000)
Intangible amortization expense	(67,779)	(67,776)
Intangible currency translation adjustment	0	0
Intangible asset	$ 474,448	$ 542,227

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Goodwill and Intangible Assets - Intangible Assets (Future Amortization) (Details)	Jun. 30, 2020 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2021	$ 2,281,149
2022	2,228,367
2023	2,149,189
2024	2,128,729
2025	2,083,188
Thereafter	$ 27,712,247

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Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 28,434,715	$ 26,914,626
Less: accumulated depreciation	(7,940,403)	(6,279,677)
Property, plant and equipment, net	20,494,312	20,634,949
Land and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	2,157,663	2,150,085
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	10,014,879	10,018,108
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	13,550,413	12,579,698
Vehicles
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	2,087,634	2,099,814
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	552,810
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 71,316	$ 66,921

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Property, Plant and Equipment - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Property Plant And Equipment [Abstract]
Depreciation expense	$ 2,580,234	$ 1,995,042

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Debt - Schedule of Total Debt Outstanding (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Working capital lines of credit
Total working capital lines of credit, net	$ 26,983,264	$ 10,755,548
Debt issuance costs	(660,000)	(372,396)
Current portion of long-term debt
Current portion of long-term debt, net	809,632	563,087
Debt issuance costs,Current	(8,154)	(11,070)
Total current portion, net	1,780,522	1,113,502
Long-term debt, less current portion
Long-term debt, net	1,642,975	1,709,481
Debt issuance costs, Noncurrent	(6,923)	(15,078)
Total long-term portion, net	14,328,823	12,158,095
Total debt, net	16,109,345	13,271,596
KeyBank
Working capital lines of credit
Total working capital lines of credit, net	0	2,350,000
CIBC
Working capital lines of credit
Total working capital lines of credit, net	11,205,664	0
National Australia Bank
Working capital lines of credit
Total working capital lines of credit, net	16,437,600	8,426,400
National Australia Bank Limited Overdraft Facility
Working capital lines of credit
Total working capital lines of credit, net	0	351,544
Promissory Note Current
Current portion of long-term debt
Unsecured Debt, Current	0	100,000
Term Loan Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	342,450	73,731
Machinery & Equipment Loans Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	272,997	215,519
Conterra RE Short
Current portion of long-term debt
Debt issuance costs,Current	(39,556)	(75,707)
Secured Debt, Current	202,374	247,942
Vehicle Loans Long Term Current | Toyota Finance
Current portion of long-term debt
Secured Debt, Current	200,779	0
Term Loan Long Term | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	3,082,050	256,303
Conterra RE Long
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	8,956,885	9,922,269
Debt issuance costs, Noncurrent	(56,038)	(24,869)
Machinery & Equipment Loans long Term | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	396,404	309,988
Vehicle Loans Long Term | Toyota Finance
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	$ 313,470	$ 0

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Debt - KeyBank Credit Facility - Additional Information (Details) - KeyBank - USD ($)		1 Months Ended	12 Months Ended
	Dec. 26, 2019	Sep. 30, 2015	Jun. 30, 2020
Line Of Credit Facility [Line Items]
Line of credit and security agreement month and year		2015-09
Line of credit facility, maximum borrowing capacity		$ 45,000,000
Line of credit facility, description			An aggregate principal amount that the Company was able to borrow, repay and reborrow, of up to $45.0 million in the aggregate.
Line of credit facility, borrowing capacity, description			A borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to the lesser of (i) 75% of the cost eligible inventory or (ii) 90% of the net orderly liquidation value of the inventory, subject to lender reserves.
Line of credit facility, termination date	Dec. 26, 2019
Repayments of line of credit facility	$ 5,900,000
Credit Facility
Line Of Credit Facility [Line Items]
Percentage of stock of foreign subsidiary collateralized for credit facility		65.00%
Eurodollar Rate | Credit Facility
Line Of Credit Facility [Line Items]
Basis spread on variable rate		2.90%
Base Rate | Credit Facility
Line Of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Event Of Default | Credit Facility
Line Of Credit Facility [Line Items]
Basis spread on variable rate		3.00%
Maximum
Line Of Credit Facility [Line Items]
Borrowing base in percentage based on eligible domestic accounts receivable		85.00%
Borrowing base in percentage based on eligible foreign accounts receivable		90.00%
Borrowing base in percentage based on cost eligible inventory		75.00%
Borrowing base in percentage based on liquidation value of the inventory, subject to lender reserves		90.00%
Borrowing base subject to lender reserves		$ 16,000,000

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Debt - CIBC Credit Facility - Additional Information (Details) - CIBC - USD ($)			12 Months Ended
	Sep. 22, 2020	Dec. 26, 2019	Jun. 30, 2020
Line Of Credit Facility [Line Items]
Line of credit and security agreement date		Dec. 26, 2019
Line of credit facility, maximum borrowing capacity		$ 35,000,000
Debt instrument, prepayment term			All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.
Line of credit facility, borrowing capacity, description			The Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.
Credit Facility | Base Rate
Line Of Credit Facility [Line Items]
Basis spread on variable rate		0.50%
Credit Facility | LIBOR
Line Of Credit Facility [Line Items]
Basis spread on variable rate		2.50%
Credit Facility | Event Of Default
Line Of Credit Facility [Line Items]
Basis spread on variable rate		2.00%
Maximum
Line Of Credit Facility [Line Items]
Borrowing base in percentage based on eligible domestic accounts receivable		85.00%
Borrowing base in percentage based on eligible foreign accounts receivable		90.00%
Borrowing base in percentage based on eligible inventory		65.00%
Borrowing base in percentage based on liquidation value of the inventory, subject to lender reserves		85.00%
Subsequent Event
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 25,000,000
Subsequent Event | Credit Facility | Base Rate
Line Of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Subsequent Event | Credit Facility | LIBOR
Line Of Credit Facility [Line Items]
Basis spread on variable rate	3.00%

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Debt - Loan Transaction - Additional Information (Details)		1 Months Ended		12 Months Ended
	Dec. 24, 2019 USD ($)	Nov. 30, 2019 USD ($)	Nov. 30, 2017 USD ($) PromissoryNote	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Line Of Credit Facility [Line Items]
Repayments of secured debt				$ 2,618,121	$ 3,290,242
Conterra | Secured Promissory Notes
Line Of Credit Facility [Line Items]
Gross proceeds from issuance of long term debt			$ 12,500,000
Number of promissory notes issued | PromissoryNote			2
Conterra | Secured Real Estate Note
Line Of Credit Facility [Line Items]
Debt instrument, principal amount			$ 10,400,000
Debt instrument, maturity date	Nov. 30, 2022
Debt instrument, maturity date, description				On December 24, 2019, the Company entered into an amendment to extend the maturity date to November 30, 2022, as well as revised the Note’s payments starting July 1, 2020.
Debt instrument, payment starting date	Jul. 01, 2020		Jul. 01, 2018
Debt instrument, interest rate			7.75%
Debt instrument, frequency of periodic payment of interest				Semi-annual payments of interest
Debt instrument, amortization schedule			20 years
Debt instrument, combined payment			$ 515,711
Debt instrument, interest only payment term				One-time interest only payment on January 1, 2018
Debt instrument, prepayment term				Pursuant to the December 2019 amendment, the Company agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time.
Repayments of secured debt		$ 753,120
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period One
Line Of Credit Facility [Line Items]
Debt instrument, payment starting date	Jan. 01, 2020
Debt instrument, combined payment	$ 515,711
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period Two
Line Of Credit Facility [Line Items]
Debt instrument, payment starting date	Jul. 01, 2020
Debt instrument, frequency of periodic payment of interest				five consecutive semi-annual principal and interest payments
Debt instrument, combined payment	$ 454,185
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period Three
Line Of Credit Facility [Line Items]
Debt instrument, payment starting date	Nov. 30, 2022
Debt instrument, frequency of periodic payment of interest				one-time final payment
Debt instrument, combined payment	$ 8,957,095
Conterra | Secured Equipment Note
Line Of Credit Facility [Line Items]
Debt instrument, principal amount			$ 2,100,000
Debt instrument, maturity date				Nov. 30, 2019
Debt instrument, maturity date, description				The Secured Equipment Note was scheduled to mature on November 30, 2019.
Debt instrument, payment starting date				Jul. 01, 2018
Debt instrument, interest rate			9.50%
Debt instrument, frequency of periodic payment of interest				Semi-annual payments of interest
Debt instrument, amortization schedule			20 years
Debt instrument, combined payment			$ 118,223
Debt instrument, interest only payment term				One-time interest only payment on January 1, 2018
Debt instrument, prepayment term				The Secured Equipment Note was repaid in full in August 2018

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Debt - Additional Information (Details)		12 Months Ended
	Aug. 15, 2018 USD ($) Point	Jun. 30, 2020 USD ($)	Jun. 30, 2020 AUD ($)
Working Capital Facility with NAB | Pasture Genetics
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 6,849,000	$ 10,000,000
Line of credit facility, termination date		Mar. 31, 2022
Line of credit facility, floating interest rate during period		1.50%
Facility outstanding amount		$ 6,849,000	10,000,000
Vehicle Loan Facility with TOYOTA Finance | Pasture Genetics
Line Of Credit Facility [Line Items]
Facility outstanding amount		$ 514,249	$ 750,839
Debt instrument maturity year		2023
Vehicle Loan Facility with TOYOTA Finance | Pasture Genetics | Minimum
Line Of Credit Facility [Line Items]
Interest rate		4.04%
Vehicle Loan Facility with TOYOTA Finance | Pasture Genetics | Maximum
Line Of Credit Facility [Line Items]
Interest rate		5.83%
American AgCredit
Line Of Credit Facility [Line Items]
Number of sale and leaseback equipment points completed | Point	5
Proceeds from sale of equipment	$ 2,106,395
Lease term	5 years
Monthly lease payments under lease agreement	$ 40,023
Annual interest rate under lease agreement	5.60%
Repurchase value of lease asset at end of lease term	$ 1
Conterra Agricultural Capital, LLC
Line Of Credit Facility [Line Items]
Repayment of debt principal amount	$ 2,081,527
Debt Instrument, stated interest rate, percentage	9.50%
Payment of outstanding interest on borrowings	$ 24,868

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Total	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Noncontrolling Interests	Accumulated Other Comprehensive Loss
Beginning Balance, amount at Jun. 30, 2018	$ 81,742,124		$ 24,367	$ (134,196)	$ 108,803,991	$ (21,161,376)		$ (5,790,662)
Beginning Balance, shares at Jun. 30, 2018			24,367,906	(25,000)
Stock-based compensation - options, restricted stock, and RSUs	694,610				694,610
Net issuance to settle RSUs, amount	(39,314)		$ 93		(39,407)
Net issuance to settle RSUs, shares			92,595
Proceeds from sale of preferred stock, net of fees and expenses	22,373,842	$ 7			22,373,835
Proceeds from sale of preferred stock, net of fees and expenses, shares		7,235
Conversion of preferred stock to common stock		$ (7)	$ 7,235		(7,228)
Conversion of preferred stock to common stock, shares		(7,235)	7,235,000
Proceeds from sale of common stock, net of fees and expenses, amount	4,927,682		$ 1,608		4,926,074
Proceeds from sale of common stock, net of fees and expenses, shares			1,607,717
Other comprehensive income (loss)	(347,805)							(347,805)
Net loss	(9,352,927)					(9,305,242)	$ (47,685)
Ending Balance, amount at Jun. 30, 2019	99,998,212		$ 33,303	$ (134,196)	136,751,875	(30,466,618)	(47,685)	(6,138,467)
Ending Balance, shares at Jun. 30, 2019			33,303,218	(25,000)
Stock-based compensation - options, restricted stock, and RSUs	1,167,951				1,167,951
Net issuance to settle RSUs, amount	(110,131)		$ 155		(110,286)
Net issuance to settle RSUs, shares			154,643
Other comprehensive income (loss)	27,043							27,043
Net loss	(19,747,098)					(19,674,324)	(72,774)
Ending Balance, amount at Jun. 30, 2020	$ 81,335,977		$ 33,458	$ (134,196)	$ 137,809,540	$ (50,140,942)	$ (120,459)	$ (6,111,424)
Ending Balance, shares at Jun. 30, 2020			33,457,861	(25,000)

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Debt - NAB Facilities - Additional Information (Details)		12 Months Ended
	Nov. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 AUD ($)
Term Loan
Line Of Credit Facility [Line Items]
Line of credit facility, termination date		Mar. 31, 2025
Facility outstanding amount		$ 3,424,500	$ 5,000,000
Line of credit facility, Principal payments	$ 500,000
Line of credit facility principal payment start date		Nov. 30, 2020
Line of credit facility, floating interest rate during period		2.60%
Line of credit facility, interest rate description		Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.
Master Asset Finance Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,369,800	2,000,000
Facility outstanding amount		$ 575,226	839,869
Debt instrument maturity year		2023
Master Asset Finance Facility | Minimum
Line Of Credit Facility [Line Items]
Interest rate		3.47%
Master Asset Finance Facility | Maximum
Line Of Credit Facility [Line Items]
Interest rate		5.31%
Keith Machinery and Equipment Facility
Line Of Credit Facility [Line Items]
Facility outstanding amount		$ 94,176	$ 137,503
Interest payable on facility above Australian trade refinance rate quote		2.90%	2.90%
National Australia Bank
Line Of Credit Facility [Line Items]
Debt guaranteed value		$ 10,273,500	$ 15,000,000
NAB Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 17,353,000	25,337,000
Line of credit facility, termination date		Mar. 31, 2022
Facility outstanding amount		$ 9,588,600	14,000,000
NAB Facility | Overdraft Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,369,800	$ 2,000,000
Line of credit facility interest accrued		5.47%	5.47%
NAB Facility | Borrowing Base Line
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,958,400	$ 16,000,000
Line of credit facility interest accrued		3.70%	3.70%

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Debt - Schedule of Annual Maturities of Short-Term and Long-Term Debt (Details)	Jun. 30, 2020 USD ($)
Debt Disclosure [Abstract]
2021	$ 1,828,232
2022	1,768,958
2023	9,985,645
2024	555,441
2025	369,491
Thereafter	1,712,250
Total	$ 16,220,017

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Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
United States	$ (18,778,030)	$ (9,336,700)
Foreign	(583,100)	(164,974)
Loss before income taxes	$ (19,361,130)	$ (9,501,674)

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Income Taxes - Components of Provision for Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Current:
Federal	$ 0	$ 0
State	15,972	28,591
Foreign	369,996	92,744
Total current provision	385,968	121,335
Deferred:
Federal	0	(227,142)
State	0	(42,940)
Foreign	0	0
Total deferred provision (benefit)	0	(270,082)
Provision (Benefit) for income taxes	$ 385,968	$ (148,747)

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Income Taxes - Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Tax benefit at statutory tax rate	$ (4,065,839)	$ (1,995,352)
State benefit, net of federal benefit	(387,398)	(304,015)
Other permanent differences	134,141	23,786
Federal and state research credits - current year	(239,373)	(228,039)
Foreign rate differential	170,693	10,819
Shortfall on restricted stock vest	10,526	49,118
Change in unrecognized tax benefit	11,778	49,939
Valuation allowance	4,540,563	2,265,361
Other	210,877	(20,364)
Provision (Benefit) for income taxes	$ 385,968	$ (148,747)

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Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($)	Jun. 30, 2020	Jun. 30, 2019
Deferred tax assets:
Net operating loss carry forwards	$ 10,681,884	$ 5,817,688
Compensation accruals	478,696	261,365
Allowance for bad debts	1,338,083	1,376,388
Stock compensation	444,725	288,648
Tax credit carry forwards	901,656	662,283
Intangible assets	1,628,858	2,226,539
Lease liability	1,126,905	0
Deferred rent	0	47,226
Assets held for sale	0	367,387
163(j) limitation interest	349,003	0
Other, net	693,637	476,411
Total deferred tax assets	17,643,447	11,523,935
Valuation allowance for deferred tax assets	(14,656,843)	(9,774,130)
Deferred tax assets, net of valuation allowance	2,986,604	1,749,805
Deferred tax liabilities
ROU lease asset	(1,253,577)	0
Fixed assets	(1,733,027)	(1,749,805)
Total deferred tax liabilities	(2,986,604)	(1,749,805)
Net deferred tax asset / (liability)	$ 0	$ 0

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Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Mar. 27, 2020	Jun. 30, 2019
Income Tax Disclosure [Line Items]
Deferred tax assets, increase in valuation allowance	$ 4,900,000
Transactions increase in ownership, period	3 years
Interest limitation carryovers	$ 1,600,000
Undistributed earnings of foreign subsidiaries	2,900,000
Unrecognized tax benefits	79,341
Unrecognized tax benefits that, if recognized, would reduce annual effective tax rate	62,679
Accrued interest and penalties associated with uncertain tax positions	0		$ 0
Unrecognized tax benefits to change significantly	0
Percentage of AMT credit receivables bonus on qualified improvement property under CARES act		100.00%
Federal
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 44,100,000
Operating loss carryforwards, expiration dates	Jun. 30, 2030
Net operating loss carryovers as result of Tax Cuts and Jobs Act, not subject to expiration	$ 24,500,000
Research tax credit carryforwards	$ 881,836
Research tax credit carryforwards, expiration dates	Jun. 30, 2031
Foreign tax credit carryforwards	$ 157,859
Foreign tax credit carryforwards, expiration dates	Jun. 30, 2023
State
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 15,700,000
Operating loss carryforwards, expiration dates	Jun. 30, 2030
Research tax credit carryforwards	$ 25,089
Australian
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 900,000
Minimum
Income Tax Disclosure [Line Items]
Percentage of transactions increase in ownership of certain stockholders	50.00%

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Warrants - Schedule of Warrants Outstanding (Details) - $ / shares	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Class Of Warrant Or Right [Line Items]
Warrants outstanding, beginning	2,699,999	2,699,999
Warrant issuances	0	0
Warrants expired	(2,699,999)	0
Warrants outstanding. ending	0	2,699,999
Warrants
Class Of Warrant Or Right [Line Items]
Warrant issue date	2014-12	2014-12
Exercise Price Per Share	$ 4.32	$ 4.32
Warrant expiration date	2020-06	2020-06
Warrants outstanding, beginning	2,699,999	2,699,999
Warrant issuances	0	0
Warrants expired	(2,699,999)	0
Warrants outstanding. ending	0	2,699,999

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Equity - Additional Information (Details) - USD ($)			12 Months Ended
	Oct. 23, 2018	Sep. 05, 2018	Jun. 30, 2020	Jun. 30, 2019	Nov. 20, 2018
Class Of Stock [Line Items]
Sale of common stock			$ 0	$ 4,927,682
Aggregate gross proceeds from sale of convertible preferred stock	$ 22,500,000		$ 0	$ 22,373,842
Preferred stock, voting rights	no
Number of preferred shares converted in to common stock	1,000
Series A Convertible Preferred Stock | Securities Purchase Agreement | MFP
Class Of Stock [Line Items]
Purchase price per share		$ 3,110
Sale of preferred stock		$ 7,235
Common Stock
Class Of Stock [Line Items]
Number of preferred shares converted in to common stock					7,235,000
Common Stock | Securities Purchase Agreement | MFP
Class Of Stock [Line Items]
Sale of common stock		$ 1,607,717
Purchase price per share		$ 3.11

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Foreign Currency Contracts - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Foreign Currency Contracts [Line Items]
Foreign exchange contract liability	$ 35,218	$ 42,255
Foreign Currency Forward Contracts
Foreign Currency Contracts [Line Items]
Foreign currency forward contracts, notional value	7,047,514
Gain on foreign exchange contracts	$ 7,615	$ 52,788
Minimum
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2019-07
Maximum
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2020-11

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (19,747,098)	$ (9,352,927)
Adjustments to reconcile net loss from operating activities to net cash provided by (used) in operating activities
Stock-based compensation	1,167,951	694,610
Change in allowance for doubtful accounts	(255,000)	996,461
Inventory write-down	2,344,800	8,822,103
Depreciation and amortization	5,036,464	4,128,546
Gain on disposal of property, plant and equipment	(23,299)	(86,222)
Goodwill impairment charges	0	11,865,811
Intangible asset impairment charges	0	6,034,792
Change in deferred tax provision	0	(270,083)
Change in foreign exchange contracts	(7,615)	(52,778)
Change in contingent consideration obligation	(302,139)	0
Change in estimated value of assets held for sale	92,931	1,521,855
Amortization of debt discount	555,049	340,847
Loss on extinguishment of debt	140,638	0
Reduction of anticipated loss on sub-lease land	0	(141,373)
Changes in:
Accounts receivable	(1,819,625)	307,209
Inventories	11,083,296	(13,331,376)
Prepaid expenses and other current assets	412,526	(413,751)
Other non-current asset	(96,398)	203,132
Accounts payable	(2,879,541)	(830,718)
Deferred revenue	(2,882,359)	8,069,734
Accrued expenses and other current liabilities	2,125,503	3,114,523
Other non-current liabilities	(709,711)	(324,564)
Net cash (used in) provided by operating activities	(5,763,627)	21,295,831
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(1,972,231)	(735,316)
Proceeds from disposal of property, plant and equipment	34,410	567,492
Proceeds from sale of assets held for sale	1,757,069	0
Additions to internal use software	0	(43,000)
Acquisition of business, net of cash acquired	(7,472,618)	(26,354,951)
Acquisition of wheat assets	(2,633,000)	0
Net cash used in investing activities	(10,286,370)	(26,565,775)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock	0	4,927,682
Net proceeds from sale of preferred stock	0	22,373,842
Taxes paid related to net share settlements of stock-based compensation awards	(110,132)	(39,314)
Borrowings and repayments on lines of credit, net	16,819,564	(21,289,159)
Borrowings of long-term debt	3,865,780	2,359,431
Debt issuance costs	(907,392)	(411,315)
Repayments of long-term debt	(2,618,121)	(3,290,242)
Net cash provided by financing activities	17,049,699	4,630,925
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(308,410)	(250,073)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS	691,292	(889,092)
CASH AND CASH EQUIVALENTS, beginning of the period	3,431,802	4,320,894
CASH AND CASH EQUIVALENTS, end of period	4,123,094	3,431,802
Cash paid (received) during the period for:
Interest	1,984,703	2,945,034
Income taxes	$ 272,027	$ 69,713

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Related Party Transactions - Additional Information (Details) - MFP Loan Agreement - USD ($)	Dec. 31, 2018	Dec. 21, 2018	Jun. 30, 2019	Dec. 18, 2018
Related Party Transaction [Line Items]
Line of credit facility, maximum borrowing capacity				$ 5,000,000
Line of credit facility, minimum increment borrowing capacity				$ 1,000,000
Line of credit facility, fixed per annum rate				6.00%
Line of credit facility, fee percentage		2.00%
Line of credit facility, drew down amount		$ 1,000,000
Repayments of line of credit	$ 1,000,000
Facility outstanding amount			$ 0

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Equity-Based Compensation - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Jan. 16, 2019	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012	Oct. 31, 2012
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted		1,899,934
Exercise price, lower range limit		$ 2.26
Exercise price, upper range Limit		$ 2.37
Stock-based compensation		$ 1,167,951	$ 694,610
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation, total compensation cost not yet recognized, period for recognition		1 year 6 months 18 days
Number of shares issued		417,933	175,758
Total fair value of vested stock		$ 940,700	$ 472,171
Stock-based compensation		700,724	$ 379,212
Unrecognized stock compensation expense related to restricted stock grants		$ 705,197
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		3 years
Maximum | Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		3 years
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		1 year
Minimum | Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		1 year
2009 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance of grants				350,343	2,450,000	2,450,000	1,700,000	1,700,000	1,250,000	1,250,000
Options granted	1,143,447
Stock options granted and outstanding, weighted average grant date fair value		$ 0.78
Unrecognized stock compensation expense, net of estimated forfeitures, related to options		$ 1,291,135
Stock-based compensation, total compensation cost not yet recognized, period for recognition		2 years 1 month 17 days
2009 Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, term		10 years
2009 Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, term		5 years
Voting stock, percentage		10.00%
Fair market value of common stock, percentage		110.00%
2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance of grants		824,840
Number of shares reserved for issuance under the plan	4,243,790
Number of new shares	2,750,000

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Equity-Based Compensation - Schedule of Weighted Average Assumptions (Details) - Stock Options	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk free rate, minimum	0.30%	1.90%
Risk free rate, maximum	1.66%	3.00%
Dividend yield	0.00%	0.00%
Volatility of common stock, minimum	39.40%	34.50%
Volatility of common stock, maximum	48.90%	41.50%
Average forfeiture assumptions	1.10%	1.10%

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Equity-Based Compensation - Summary Of Stock Option Activity (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options, Outstanding as of beginning of period	1,122,752	792,074
Options, Granted	1,899,934	497,178
Options, Canceled/forfeited/expired	(146,792)	(166,500)
Options, Outstanding as of end of period	2,875,894	1,122,752	792,074
Options, vested and exercisable at end of period	1,079,783
Options, vested and expected to vest	2,866,236
Weighted-Average Exercise Prices, Outstanding as of beginning of period	$ 3.55	$ 4.55
Weighted-Average Exercise Prices, Granted	2.36	2.85
Weighted-Average Exercise Prices, Canceled/forfeited/expired	4.12	6.17
Weighted-Average Exercise Prices, Outstanding as of end of period	2.74	$ 3.55	$ 4.55
Weighted-Average Exercise Prices, vested and exercisable	3.21
Weighted-Average Exercise Price, vested and expected to vest	$ 2.72
Options Outstanding, Weighted-Average Remaining Contractual Term (in years)	8 years 7 months 6 days	8 years	6 years 3 months 18 days
Weighted-Average Remaining Contractual Term (in years), vested and exercisable	7 years 7 months 6 days
Weighted-Average Remaining Contractual Term (in years), vested and expected to vest	8 years 7 months 6 days
Options, Outstanding, Aggregate Intrinsic Value	$ 22,409	$ 34,135	$ 10,413
Options, vested and expected to vest, Aggregate Intrinsic Value	$ 22,311

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Equity-Based Compensation - Summary of Activity Related to Non-Vested Restricted Stock Units (Details) - Restricted Stock Units - $ / shares	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Nonvested Restricted Stock Units Outstanding, Beginning	157,204	89,193
Number of Nonvested Restricted Stock Units, Granted	417,933	175,758
Number of Nonvested Restricted Stock Units, Vested	(177,010)	(107,747)
Number of Nonvested Restricted Stock Units, Forfeited	(1,324)
Number of Nonvested Restricted Stock Units Outstanding, Ending	396,803	157,204	89,193
Weighted-Average Grant Date Fair Value, Beginning	$ 2.69	$ 3.98
Weighted-Average Grant Date Fair Value, Granted	2.25	2.69
Weighted-Average Grant Date Fair Value, Vested	2.45	3.75
Weighted-Average Grant Date Fair Value, Forfeited	2.83
Weighted-Average Grant Date Fair Value, Ending	$ 2.33	$ 2.69	$ 3.98
Weighted-Average Remaining Contractual Life (Years)	1 year 7 months 6 days	1 year 4 months 24 days	1 year 1 month 6 days
Weighted-Average Remaining Contractual Life (Years), Granted	2 years 9 months 18 days	2 years 9 months 18 days

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Non-Cash Activities for Statements of Cash Flows - Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities (Details) - USD ($)	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Supplemental Cash Flow Elements [Abstract]
Purchases of equipment classified as finance lease	$ (468,390)	$ (574,018)
Contingent consideration issued	$ (4,407,887)	$ 0

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Paycheck Protection Program - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2020	Jun. 30, 2020	Jun. 30, 2019
Unusual Or Infrequent Item [Line Items]
PPP grant income		$ 1,958,600	$ 0
PPP
Unusual Or Infrequent Item [Line Items]
Loan maturity period	2020-04
Proceeds from loan	$ 1,958,600
Debt instrument, interest rate	1.00%
Loan and interest paid back period	18 months
PPP grant income		1,958,600
PPP loan liability		$ 0

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Subsequent Events - Additional Information (Details) - CIBC - USD ($)	Sep. 22, 2020	Dec. 26, 2019
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		$ 35,000,000
Revolving Credit Facility
Subsequent Event [Line Items]
Line of credit facility availability reserve		$ 5,000,000
Revolving Credit Facility | Base Rate
Subsequent Event [Line Items]
Basis spread on variable rate		0.50%
Revolving Credit Facility | LIBOR
Subsequent Event [Line Items]
Basis spread on variable rate		2.50%
Inventory
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		$ 25,000,000
Subsequent Event
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity	$ 25,000,000
Subsequent Event | Revolving Credit Facility
Subsequent Event [Line Items]
Increase on interest rate	0.50%
Debt instrument covenant compliance to maintain minimum fixed charge coverage ratio until March 31, 2021	110.00%
Debt instrument covenant compliance to maintain minimum fixed charge coverage ratio after March 31, 2021	115.00%
Maximum amount to be maintain EBITDA under financial covenant	$ 6,000,000
Line of credit facility availability reserve	7,500,000
Increase in line of credit facility availability reserve each month	$ 500,000
Increase in line of credit facility availability reserve commencement date	Nov. 01, 2020
Expected maximum line of credit facility availability reserve	$ 10,000,000
Subsequent Event | Revolving Credit Facility | Base Rate
Subsequent Event [Line Items]
Basis spread on variable rate	1.00%
Subsequent Event | Revolving Credit Facility | LIBOR
Subsequent Event [Line Items]
Basis spread on variable rate	3.00%
Subsequent Event | Revolving Credit Facility | LIBOR Floor
Subsequent Event [Line Items]
Basis spread on variable rate	1.00%
Subsequent Event | Inventory
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity	$ 12,500,000

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Background and Organization

12 Months Ended

Jun. 30, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

BACKGROUND AND ORGANIZATION

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

The Company began as S&W Seed Company, a general partnership, in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. We then incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company’s initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership’s original business. Seed Holding, LLC remains a consolidated subsidiary of the Company.

In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation.

On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd, or S&W Holdings, consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation, or SGI, from SGI’s shareholders. In April 2018, SGI changed its name to S&W Seed Company Australia Pty Ltd, or S&W Australia.

On September 19, 2018, the Company and AGT Foods Africa Proprietary Limited, or AGT, formed a venture based in South Africa named SeedVision Proprietary Limited, or SeedVision. SeedVision will leverage AGT's African-based production and processing facilities to produce S&W's hybrid sunflower, grain sorghum, and forage sorghum to be sold by SeedVision in the African continent, Middle East countries, and Europe.

On February 24, 2020, S&W Australia, acquired all of the issued and outstanding shares of Pasture Genetics, from Pasture Genetics’ sole shareholder.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds, primarily alfalfa seed. The Company owns seed cleaning and processing facilities, which are located in Five Points, California, Nampa, Idaho, Dumas, Texas, New Deal, Texas and Keith, South Australia. The Company’s seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products.

The Company has also been actively engaged in expansion initiatives through a combination of organic growth and strategic acquisitions, including in December 31, 2014, when the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets and assumed certain related liabilities, or the Pioneer Acquisition, of Pioneer Hi-Bred International, Inc., or Pioneer.

The Company had a long-term distribution agreement with Pioneer regarding conventional (non-GMO) varieties, and a production agreement with Pioneer (relating to GMO-traited varieties). These agreements were terminated on May 20, 2019. See Note 4 for further discussion.

In May 2016, the Company acquired the assets and business of SV Genetics, a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represented the Company’s initial effort to diversify its product portfolio beyond alfalfa seed and stevia.

In October 2018, the Company acquired substantially all of the assets of Chromatin, Inc., a U.S.-based sorghum genetics and seed company, as part of the Company's efforts to expand its penetration into the hybrid sorghum market.

In August 2019, S&W Australia, a wholly owned subsidiary of S&W Seed Company, licensed certain wheat germplasm varieties and acquired certain equipment from affiliates of Corteva.  In the transaction, S&W Australia paid a one-time license fee of $2.3 million and an equipment purchase price of $0.3 million.  The license has an initial term of 15 years.

In February 2020, S&W Australia acquired Pasture Genetics, the third largest pasture seed company in Australia, as part of the Company’s efforts to diversify its product offerings and expand its distribution channels.

The Company’s operations span the world’s alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, Texas, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 40 countries around the globe.

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Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. We have recorded a combined $1.3 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2020. We have recorded a combined $0.6 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2019.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows. The new strain of coronavirus (“COVID-19”) in FY2020 and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared. However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 26% of its revenue for the year ended June 30, 2020. One customer accounted for 65% of its revenue for the year ended June 30, 2019.

One customer accounted for 21% of the Company’s accounts receivable at June 30, 2020. One customer accounted for 19% of the Company’s accounts receivable at June 30, 2019.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 54% and 20% of revenue during the years ended June 30, 2020 and 2019, respectively. The net book value of fixed assets located outside the United States was 17% and 11% of total fixed assets at June 30, 2020 and June 30, 2019, respectively. Cash balances located outside of the United States may not be insured and totaled $1,690,748 and $236,822 at June 30, 2020 and June 30, 2019, respectively.

The following table shows revenue from external sources by destination country:

	Years Ended June 30,
	2020				2019
United States	$	36,724,591	46	%	$	88,176,809	80	%
Australia		15,079,996	19	%		2,787,128	3	%
Saudi Arabia		9,189,291	12	%		4,745,993	4	%
Mexico		2,454,504	3	%		2,264,827	2	%
South Africa		2,182,553	3	%		797,722	1	%
Pakistan		2,124,038	3	%		1,009,120	1	%
Italy		1,400,641	2	%		326,364	0	%
Sudan		1,308,874	2	%		717,317	1	%
Libya		1,142,920	1	%		2,629,750	2	%
France		1,040,744	1	%		845,172	1	%
Other		6,934,046	8	%		5,422,309	5	%
Total	$	79,582,198	100	%	$	109,722,511	100	%

Covid-19 Pandemic

In addition to the foregoing, the Company is monitoring closely the impact of the COVID-19 pandemic on its business, including its results of operations and financial condition, and has implement measures designed to protect the health and safety of its employees while continuing its operations.  

In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. The Company’s sales efforts also have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically the Company’s most active selling period, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, the Company immediately attempted to shift its sales activities to video conferencing and similar customer interaction models, but the Company has found these alternative approaches to generally be less effective than in-person sales efforts.

In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, this would adversely affect the Company’s product revenue.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

The terms of the Company’s loan and security agreement with CIBC place restrictions on its operating and financial flexibility (See Notes 9 and 19). The COVID-19 pandemic creates risk in the Company’s ability to comply with its CIBC covenants which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. In order for the Company to maintain compliance with its CIBC covenants, the Company may need to obtain additional capital or alternative financing. There can be no assurance that the Company will be successful in raising additional capital or obtaining alternative financing. If the Company is unable to raise sufficient additional capital or obtain alternative financing, it may need to reduce the scope of its operations or sell certain assets.

International Operations

The Company translates its foreign operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $1,366,220 and $1,576,900 at June 30, 2020 and June 30, 2019, respectively.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

The Company’s subsidiary, S&W Australia, does not fix the final price for seed payable to its growers until the completion of a given year’s sales cycle pursuant to its standard contract production agreement. S&W Australia records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management’s best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

During the fourth quarter of the year ended June 30, 2019, the Company recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations.  $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered the Company’s planned consumption of these varieties and as a result the Company determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices.  The remaining inventory write-down primarily relates to changes in the Company’s assessment of the future market prices for non-dormant alfalfa seed varieties.  The changes in the Company’s assessment occurred as it updated its business plans taking into account activity during the fourth quarter of fiscal year 2019, which is the height of the sales season for non-dormant varieties.

Components of inventory are:

	June 30, 2020		June 30, 2019
Raw materials and supplies	$	1,227,185	$	664,541
Work in progress		4,395,503		5,664,934
Finished goods		58,260,250		64,966,045
	$	63,882,938	$	71,295,520

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 years for vehicles. 

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 20 years for customer relationships, 15 years for trade names and 16 years for other intangible assets.

Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2020 on its one reporting unit and determined that goodwill was not impaired. See Note 7 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2019 and recorded an impairment charge of $11.9 million.  During the year ended June 30, 2020, the Company did not record an impairment charge.  The impairment charge in fiscal year 2019 related to the full impairment of the Company’s goodwill and was a result of the termination of the distribution agreement with Pioneer/Corteva.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $1.3 million at June 30, 2020 and 2019, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted ASU 2016-01,Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.  

Prior to July 1, 2018, the investment was accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges would have been recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

No adjustments for impairment or observable transactions were made in fiscal years 2020 or 2019.  

Research and Development Costs

The Company is engaged in ongoing research and development, or R&D, of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s effective tax rate for the years ended June 30, 2020 and 2019 has been affected by the valuation allowance on the Company’s deferred tax assets.

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, or EPS, is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

The treasury stock method is used for common stock warrants, stock options, and restricted stock awards. Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with net number of shares assumed to be issued added to the denominator.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2020			2019
Numerator:
Net loss attributable to S&W Seed Company	$	(19,674,324	)	$	(9,305,242	)
Numerator for basis EPS		(19,674,324	)		(9,305,242	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(19,674,324	)	$	(9,305,242	)
Denominator:
Denominator for basic EPS-weighted- average    shares		33,348,263			30,102,158
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Warrants		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		33,348,263			30,102,158
Basic EPS	$	(0.59	)	$	(0.31	)
Diluted EPS	$	(0.59	)	$	(0.31	)

The effects of employee stock options and stock units, and warrants are excluded because they would be anti-dilutive due to the Company’s net loss.  

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Refer to Note 4 and Note 7 for impairment discussion.

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;

• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The assets acquired and liabilities assumed in the Chromatin acquisition were valued at fair value on a non-recurring basis as of October 25, 2018.

The assets acquired and liabilities assumed in the Dow Wheat acquisition (see Note 7) were valued at fair value on a non-recurring basis as of August 15, 2019.

The assets acquired and liabilities assumed in the Pasture Genetics acquisitions (see Note 6) were valued at fair value on a non-recurring basis as of February 24, 2020.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates.

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

	Fair Value Measurements as of June 30, 2020 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	35,218	$	—
Contingent consideration obligations	$	—	$	—	$	4,263,503
Total	$	—	$	35,218	$	4,263,503

	Fair Value Measurements as of June 30, 2019 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	42,255	$	—
Total	$	—	$	42,255	$	—

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, or ASU 2017-04, effective July 1, 2018. This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance was applied during the goodwill impairment test in the fourth quarter of 2019.  See Note 7.

The Company adopted Accounting Standards Update No. 2016-02: Leases, or ASU 2016-02, effective July 1, 2019.  ASC 842 superseded previously existing guidance on accounting for leases and generally requires all leases to be recognized in the statement of financial position.

The adoption of ASC 842 resulted in the recognition of $2.6 million of right-of-use assets, or ROU assets, and $4.3 million related lease liabilities as of July 1, 2019, with no cumulative effect adjustment. The adoption of ASC 842 had no impact on the Company’s consolidated statement of operations and consolidated statement of cash flows.

The Company adopted ASC 842 on a modified retrospective approach at the effective date and, therefore, did not revise comparative period information or disclosure.  In addition, the Company elected the package of practical expedients permitted under ASC 842.

See “Note 3—Leases” for additional information on the adoption of ASC 842.

Recently Issued, but Not Yet Adopted, Accounting Pronouncements

In August 2018, the FASB issued authoritative guidance intended to address a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract.  This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.  The guidance also requires presentation of the capitalized implementation costs in the statement of financial position and in the statement of cash flows in the same line items that a prepayment for the fees of the association hosting arrangement would be presented, and the expense related to the capitalized implementation costs to be presented in the same line item in the statement of operations as the fees associated with the hosting element (service) of the arrangement.  This guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted.  The Company’s adoption of ASU 2018-15 on July 1, 2020 is not expected to impact its consolidated financial statements and related disclosures.